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It would end up going one of two ways.
>extremely limited gimmick where you can only fuse around 20 combinations of Pokemon
>SMT-style where there's some sort of formula and it just merges the two you pick into some other existing Pokemon based on a formula with stats/moves pulled from its components
The second could be mildly interesting, but whenever you say fusion, most people picture shit like the OP image and would be disappointed if that wasn't the case.