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I never watched most of the Pokémon movies past the first one. So I really don't have any attachment to Lugia.
I can't really pin down what's supposed to be, some people say it's a bird? But it has the texture of an orca whale? With huge hands and rabbit feet? I find those details a bit unsettling. Obviously Shudo wasn't an artist so this is what he was able to come up with, clearly inferior in looks to Ho-oh (and its lore in the Johto region is undefined because it wasn't even in the Spaceworld 97 demo, showing it was a late-development addition).
But yeah, I'm not surprised if it ressonates with the more fetichistic part of the fandom.
