idk, maybe it needs a bit of context: if it's a game where both canons and OCs are allowed, then why didn't they just app the canon character to begin with? And did they try to hide the fact that they were apping an analogue to the canon character, or were they upfront about the similarities?
Like, I once wrote a necromancer in a semi-satirical game called Doctor Odd that was an open & loving spoof of Doctor Strange, but also a completely original character in his own right. If it's an OC, definitely write your own application, damn.
My inclination is that plagiarism is gauche and frowned-upon -- if it's the sort of thing where you're apping a canonical character and for history you just go "blah blah, description taken from [wiki] because COMIC BOOK CHARACTER HISTORIES ARE LONG AND WILD AND REWRITING THIS WOULD TAKE TOO LONG", sure, but if you app an OC and actively pretend they're original while ripping off a canon that you weren't allowed to play, that's another thing. So basically: context matters for me. I like your compromise, but if I were you, I'd wish they'd explored potential compromises with you before going ahead and apping a direct analogue?