I think it's more that people feel uncomfortable treating a human character as a pet. It has become more prevalent in anime too (though not all bad like the gifs already in this thread). I'm sure you're all aware of Hayao Miyazaki's quotes of how the industry seems to be creating characters as mere pets. Much of the cute girls doing cute things in situations that make them act like pets for the viewer, and much of where most waifu talk comes from because a waifu or husbando is a mere object and the emotions for them are mostly in their acts and looks because they're devoid of personality or barely a character at all.
Yes, I also just insulted my own waifus too like Princess Daisy, and everyone's love for Rosalina and so many more game and anime characters.
There's also that people, even in Japan had issues with the face touching, finding it weird. The west would find it even more weird. I think even if the dialogue was changed, people would still have that weird feeling of treating the character like a pet.
Some already brought up the reddit translation of the newest art book too in that the dev team had issues and there was a lot of disagreement over the 2Dlive stuff as well that compromises were made to what some originally wanted.
Overall, the 2Dlive stuff in the game seems like a total nightmare from its conception.
Also the Machoke thing, yeah that could make some uncomfortable for sure. Pokemon are pets primarily, but touching in certain areas can look and feel very wrong regardless of what form they take.