A beat em up might work, like with the Grimm as foes but like you said Grimm are a total non-threat.
Well that's actually why I think it would work well as a beat-em-up. The Grimm as we're told are built up as these kind-of individual world-class threats akin to Monster Hunter monsters that would need an entire team to take them down, but as we're shown they're just common fodder and that's what would make them perfect mob enemies for a beat-em-up where you'll plow through maybe dozens of the same enemy type in every zone. TBH the White Fang were done the same way but I'm not sure you'd want to have WF enemies in a RWBY game.
Maybe RT might be black listed but what about, uhhh Viz I think?
Yeah, it was Viz, and truth be told I'm not sure what Japanese corporate culture is like, if the IP going through a few changes of hands might give prospective animation studios amnesia or if word got out about the specific people involved. I'm more willing to believe the latter, but I think this is really the first big time Viz has had an IP to itself as they're normally a localization/licensing company so we'll have to see what even comes of this acquisition.