Dude, the "look and feel" of The Two Sides was plagiarism, clear and simple. So what if they traced the assets onto new graphics by hand, it's the same goddamn thing. Remember how they told you in middle school, "You can't copy the encyclopedia line-for-line, and you can't even just rephrase the sentences while keeping the basic structure and information the same, you have to make your own composition from scratch"? This is that.
And yeah, plagiarism isn't a legal definition. But if you took a layperson (or even a gamer who has seen X-Com but never really got into it) and showed them TTS alongside UFO, don't you think they might figure it's the same thing? I don't mean similar in concept, I mean ACTUAL SAME THING? The TTS graphics are essentially higher-resolution copies of the original graphics. The Skyranger is seriously the same craft, except it has a side door. If I sit across the room and look at those screenshots, I can't even tell it isn't UFO, and I've put a lot of hours into it. (Yeah, I know I need new glasses, but come on.)
So...they copied it. It is a clear and simple derivative work. Copyright is literally the ability to say "I don't want you copying or deriving from my stuff". Not quite sure how they thought they would get away with it.
As for the gameplay, that's a lot more nebulous, but when your graphics are this much of a ripoff who even cares?