In theory those characters are under copyright, yes. But it's similar to posting memes or lets plays; they don't lawyer against it unless they're assholes. So, avoid Mario, I guess.
However, the training data used by many of these huge models of full of copyrighted material from smaller, poorer creators, which is a serious problem IMO. But they can't afford to lawyer up against the big megacorps so nobody in the US listens to them.
GenAI is really the rich get richer.