I had doubts.
Then the article quotes Cameron saying as much in an interview.
Yah. Should give her a couple hundred grand.
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OK then.
Real stupid of him.
Wouldn't have seen a resemblance between this beatiful woman and this:

She's not blue
Yes, open that can of worms!
The same happened to me. In the end I had to show my naked bum in court, but the makers of JD Vance had more funds and hence slicker lawyers.
This feels like the sort of blurry case that litigation is actually well suited for. It's clear there was something beyond an inspiration board, yet the end result is also a blue alien. Evaluate the law, establish a value for the design, and make your case. In typical James Cameron fashion, there's a sense of "I mean well, so I can't possibly be an insufferable jackass!"
I can see an ideal way this could have gone, like we could have someone with authority like Cameron say: "hey fanbase: this person is the face that inspired the design for the character we made -- because we did not mete out an agreement in advance it is now up to the courts to determine how to monetarily compensate her for her contribution to the work."
I'm not an artist, but I would like to be, I am interested in preserving what I will call the "chain of inspiration" in making something. What inspired you to create this thing?, what works did you copy from and how did you translate them into your own work? I think this is instructive for people who want to make art... but when it comes to for-profit projects like a hollywood film it'd be a huge expense that studios will fight against.
Hmm, I always figured having brain storm boards for character concepts was always a thing, and that these start with real "stolen" images. It seems like this goes above that but her likeness was just a starting point, it's not like you can tell it's her from the final concept.
I love seeing Disney get sued though.