Essentially, the game was originally created as an unofficial upgrade to Pac-Man arcade games by a third party, GCC. GCC then licensed Ms. Pac-Man to Namco, with a contract stipulating that they were due royalties for any Ms. Pac-Man coin operated games, as well as any electronic distribution of Ms. Pac-Man. Namco then forgot about the contract after Ms. Pac-Man went out of production in the mid-80s, meaning that the extremely broad "electronic distribution" term was never renegotiated.
In the early 2000s, Namco started releasing Ms. Pac-Man/Galaga multigame cabinets without paying GCC's successors royalties, so they sued Namco. The arbitrator decided that "coin operated game" meant that GCC's successors were due royalties from any Ms. Pac-Man machine with a coin slot, but not machines without coin slots meant for home use. More importantly, they decided that because the contract defined "electronic distribution" as "any use in which the game is broadcast or in any other way transmitted to other receiving devices", this meant that GCC's successors were due royalites for rereleases of Ms. Pac-Man on any device with internet connectivity.
Around 2018, Namco reached out to GCC's successors in an attempt to buy out their royalty rights. Before negotiations completed, AtGames, a company that mostly focuses on rereleasing old games, significantly outbid Namco. Namco contacted AtGames saying that if AtGames didn't rescind their offer, Namco would permanently stop licensing their titles to AtGames and ensure that "there is zero income stream delivered pursuant [to the GCC] agreement".
Since that point, the only new Ms. Pac-Man rereleases have been standalone games that fall under the "not coin operated" loophole. In 2022, they delisted most existing Ms. Pac-Man rereleases, likely to cut AtGames off from receiving any Ms. Pac-Man royalties at all. Additionally, Namco has started editing the Ms. Pac-Man character out of rereleases of other Pac-Man games in favor of a new "Pac-Mom" character (likely as an attempt to reduce awareness of Ms. Pac-Man to further devalue AtGames's purchase).