Essentially, i wanted to make in the future some games. (Rusty but good(?) developer who is just starting to learn Unity, so it will get a while to do them)

The problem is that i want to make Paper-Mario like games, "knockoff" version of the setting included. (I know that it will have to be sufficently different and with sufficently different mechanics, but i hope not too much. Also discussion for another day.) But to make peoples aware of what i want to do, i wanted to create a short plain free Paper Mario fangame, and send it to peoples who are interested into such games to play.

When Nintendo inevitably tell me to cease and desist (They ceased and desisted a single remade Mario 64 level, a short fangame is going to be nuked on the ground.), can i polish it, modify the graphics, eliminate the Mario part and puts my similiar setting, and relase it as a payable game? (I mean, i will already have done the work: why not profit from it a bit?) Or it is better to simply skip the fangame part, and try to get it known by sheer familarity?

IANAL

Nintendo will cease and desist your fan game because it uses the Mario IP. When you remove the IP from the game, as long as you are not infringing on any other IP, patent or copyright, you should be fine.

Personally, I would skip the fangame part. Just doesn't seem to be worth the hassle.

If it were me, I would definitely skip the fan game.

If you do get a C&D, you put yourself on Nintendo's radar. If they later decide that the changes you make are insufficient and take further legal action, can you defend yourself? I'm willing to bet that Nintendo have deeper pockets and better lawyers than you do. They don't even have to win. They just need to make it too expensive for you to fight.

If your game is good enough to stand on its own merits, then take the time to do it properly.

You can get away with making a clone as an early version of your game so long as you don't share it with anyone. It's probably still technically wrong somehow, but nobody will ever know.

Repeating: Nintendo is extremely protective of their IP.

Mario usually tops the list as the most well-known video game character, occasionally taking the #2 spot in various age groups to characters like pac-man or master chief.

Strongly warning against touching any IP related to Mario. Doing so is only a matter of time before legal action happens. A post like the one above shows you know it was wrong and illegal but went ahead and did it anyway. While they might start with a C&D, since you are showing you wilfully violated their IP they might jump straight to stronger legal actions. Individuals usually can't afford that kind of lawsuit, not even a little bit of it.

The mechanic of switching 2D and 3D is probably fine as mechanic, but the other things are off limits.

OK, no fangame. I've already asked elsewhere and got the same answer, so definitively not doing it. (Actually still doing it only for myself, because it has a lot of mechanics in common and i can simply scrap the story and make a copy of the first chapter of Paper Mario 64 to test things.)

The mechanic of switching 2D and 3D is probably fine as mechanic, but the other things are off limits.

How many mechanics are off limit? I am pretty sure there was a unpolished knockoff of Super Smash Brothers (punch time explosion) and it doesn't seem to have gotten any problem.

How many mechanics are off limit?

As a famous example, the game that appeared in loading screen for Ridge Racer on the PS1 was patented so no other developers could do that. (The patent has since expired IIRC).

Basically there are a lot of patents on game mechanics in the industry. I don't know which ones as to knowingly infringe on a patent incurs triple damages.

If you want to know which patents you game might infringe you need to talk with a licensed IP lawyer. You can try to search google patents but you would need to be good enough at searching that you know you have found all relevant patents AND you know how to read them to understand what they cover. As far as you game goes it is OK to cover basic game play (otherwise there would only be a coupe side scrollers) so if you want to make a game where a 2D hero is on a side scroller and can play with 3D effects to change things then you would be fine. but make him an Italian plumber and now you are getting on the wrong side of things. Basically you have to view the game in two categories, game play and unique game content (characters, names, images, exact story plot). The first category is USUALLY just fine to use where as the second is a danger zone for the most part. Unfortunately there is no bright line of when you went to far so just try to be careful.

but make him an Italian plumber and now you are getting on the wrong side of things.

You seem to be mixing patents with trademarks.

but make him an Italian plumber and now you are getting on the wrong side of things.

You seem to be mixing patents with trademarks.

I did cross over from patents to trademarks, but i think it works. 1) video game patents are usually very narrow in what they cover so most developers wont run into these. 2) The conversation had gotten on to patents but the OP is more likely to hit trademark and copyright problems than patent problems.

You're basically asking, "How much can I lie, cheat, and steal, without suffering consequences?" (this link directly answers the first half of your post)
It's not a good question to ask.

Regardless of whether your goal is making great games or making money, you should instead ask: "How can I make *my own* game, that is better than and greatly improves upon Paper Mario?"

As a general rule of thumb, you can use the ideas in games, but not the fine details. (this isn't legally true, but it is generally true as a matter of practice - most games borrow heavily from each other in ways that other industries don't tolerate).

As a better rule of thumb, analyze your motives and think it through: if you are trying to capitalize off of Mario's fame and popularity, rather than merely like an idea or two in a Mario game, then you are trying to cheat to make your game popular, rather than making a good game that deserves to be popular. You're not only cheating Nintendo, but you are also cheating consumers.

Whether or not you release your game for free doesn't give you protection. If you are trying to capitalize off Nintendo's property for your own personal gain; whether it be building a fanbase, or praise and pats on the back from the community, or to promote your next game, you are exploiting Nintendo's work to give yourself a cheating boost or good feelings, and it hurts Nintendo (short-term) and the public (long-term), so the court system will not look kindly on you and you can be fined money even if you made zero money, because you potentially cost Nintendo money (theoretically) or damaged their brand, and you benefited in non-money ways (the praise of people, and increased fan base, for example).

On the other hand, if you like some of the ideas in Paper Mario (camera angle or a few mechanics, for example), and make an awesome Paper Mario-esqe game, and players don't even realize it's inspired by Paper Mario, then you're almost certainly in the clear (again, not necessarily legally, but by standard behavior of the industry at large).

I've also considered making Paper Mario-esqe games (they are great games), and have zero fear of getting sued, because I'm not trying to use the popularity of Paper Mario to artificially boost my sales or fanbase, but would merely be using some of the ideas to make my own different game.

To answer the second half of your question, after Nintendo sues you to smithereens for intentionally, openly, and knowingly using their IP for your profit (financial or otherwise), yes, you can simply remove all the parts that were infringing and re-release it, assuming you didn't lose the rights to your own half of the work when settling the lawsuit.

Spryfox vs 6waves is interesting in that regard. 6waves cloned Spryfox's game Triple Town, and made a game called YetiTown, so Spryfox took them to court, and when it was apparent that Spryfox was going to win, 6waves cut a deal with Spryfox giving Spryfox ownership of the 6wave's cloned version (likely in addition to a huge amount of money, but the details are secret).

"As several news outlets have discovered, we have amicably settled our lawsuit with 6waves. We are very happy with the outcome and glad to be finished with this matter. The full terms of the settlement are confidential, but I can disclose that as a consequence of the settlement, ownership of the Yeti Town IP has been transferred to Spry Fox." - Founder of Spry Fox