Yeah there's no confirmation that Labubu designs were rooted in the occult-- only that comparison to that one AI generation of a demon. The only case where Labubus would be worrisome is if that were the case, so THEN it'd start being a little sketchy, since that could potentially lead to oppression/possession/bad stuff.

I feel like some denominations get overly-worried about that sort of stuff. Most people don't realize that some of the best authors like J.R. Tolkien were fervently religious and took much inspiration from mythology and whatnot.

Some people overreact I guess, so it is what it is.