Yeah indeed, it's not wrong to make new Jazz games. There are some on J2O, it's not illegal unless sold without a license. In other words you can do what you want for free, although you can't sell Jazz because it's Epic's intellectual property.
The only thing JJ3d needs is a save feature, and multiplayer can be removed as it's likely not been tested. Otherwise multiplayer needs an online server to host games. The single player campaign is impossible to beat without saving.
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