As far as I can tell The Day Before was overhyped early and people bought it because of the marketing

https://www.reddit.com/r/TheDayBefore/comments/lwaach/people_keep_saying_its_a_scam_whats_the_scam/

That's a 3 years old post. Everybody knew it was a scam back then. to the point the studio released "We are not a scam, trust me bro" statements (which made it more obvious it was a scam)

I don't remember hearing about it before

Internet has been talking about "pokemon with guns" for 2 years or so since the developers were already famous because they launched a "Breath of the Wild" knock off (Craftopia) that also sold well (not at the same level of palworld, but for being the first title of a brand new indie studio it sold really well)