Copyright and derivative are rather complex legal issues and honestly it can come down to just pure opinion and it can be an expensive and lengthy process to prove yourself right against the opinion of a company or business that have an interest in defending their IP.

Mesh derivatives can also be a very fine line these days with tools available such as mesh shrink wrapping that see an entire mesh being labelled as derivative simply from the way it was formed into shape. I think the main issues here in wolf359s case has more to do with the figure/mesh being seen as some kind of Low Res Genesis clone, which was likely modelled from the Genesis figure base. This enough would be grounds to see the mesh as some kind of derivative work, using the actual legal definition of the term "is a work based upon one or more preexisting works". The main issue with copyright is when Daz 3D says it feels an item is derivative and move forward to issue a cease and desist notice, if you disagree with that diagnosis, then your only real options are to begin legal proceeding to show that this item is in no way derivative of the Genesis figure mesh.

How strongly do you feel the case here is that this item is in no way 'based' on pre-existing IP owned by Daz 3D?

If this same mesh was marketed as a static low res human shape unconnected to Genesis, I don't think any issue would of arose with distributing the mesh. Context matters.