Fan Art is illegal to sell. However most artist get away with selling their fan work (unless it's Disney). Unless it affects their underline, mostly companies don't care because a small artist selling fanart doesn't affect them. Ken Penders however may be a special case. I'm not just talking about using M25YL again. SEGA may not care about that considering all the fan projects I see going around. Just look at Esty. I'm more looking at the stock and traced images he has in his LSC comic (with the pages he's shown so far). Someone could send Penders a cease and desist if he used a copyrighted photograph without a license to use it.
Here some videos:
seanwes tv 142: Can I Sell Fan Art?
Ponder Sprocket: Adventures in Critiquing - Rain on Sunny Day