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After some time down the rabbit hole, I found there’s another possibility…
Hanna Barbera, that made the cartoon Godzilla, created Godzooky, and would retain the rights rather than Toho.
The IP rights would have transferred to Warner Brothers when they bought Hanna Barbera.
While WB isn’t actively involved in M:LOM, they are partners in the overall Monsterverse IP with Legendary Entertainment. So, using one of their own legacy kaiju, bringing an old fan favourite to live action, could be seen as a way to give new life to those rights.
After some time down the rabbit hole, I found there’s another possibility…
Hanna Barbera, that made the cartoon Godzilla, created Godzooky, and would retain the rights rather than Toho.
The IP rights would have transferred to Warner Brothers when they bought Hanna Barbera.
While WB isn’t actively involved in M:LOM, they are partners in the overall Monsterverse IP with Legendary Entertainment. So, using one of their own legacy kaiju, bringing an old fan favourite to live action, could be seen as a way to give new life to those rights.