Sounds very similar to The Heroes Journey, which was a heavily modified EverQuest emulation server that got destroyed in court by Daybreak Games, the current owners/operators of EQ.

THJ was sort of like arcade mode EQ and became wildly popular (relatively, for such an old game) and started making real money off donations and in-game transactions. They likely flew too close to the sun by making money off it, but it demonstrates that there is real creative opportunity with these old IPs if only given the chance. See also the rise of classic and progression servers for the likes of EQ & WoW, which also started as a community emu effort but have now been officially launched and monetized by the IP owners.

And now Daybreak is launching their own THJ-alike but without any of the community goodwill so we'll see how that goes.