the contractor's liability still exists, its still infringement without commentary related to the game. (also, vtuber corps are going to lose the contractor shield if it goes down in a liberal state. they wont be contractors in the eyes of california since it fails the B and C part of the test.
for example, meat pippa would have to still operate her yuni luna vtuber as a business along side of pippa for phase to pass the c part of california's independent contractor test.