To save you a trip through Twitter comments and give you the TL;DR of this:

Firstly, as Diives said, this is not even a explicit animation per sen and it could (arguably) even pass KYM's rules if it was uploaded here, albeit there is still a sexual connotation about hentai tentacles, for sure.

Secondly, most of the lashout – which was not all that much – came from a few rogue fellow artists supposedly having an issue with it, like DieselBrain, but people were quick to point out how he has drawn no less than Kirby with a huge dick, character established to be a little boy, and animated Toriel fucking Frisk, with this last one being explicit porn for obvious arousal purposes, thus making him nothing but a huge hypocrite trying to gain moral points talking down a more popular artist for doing far more tame stuff than him.

And last but not least, Diives has drawn Pokemon girls like Misty several times, who are often the same canon age as Peni, so this is also yet another case of the common internet bias of going on a "how they look" basis, making the whole argument moot.

So yes, in hindsight, maybe Diives, being a Chilean, should have stuck with pandering to Latin American people where he would not have to deal with this stuff at all, but oh well.

Anyway, here is what I think was the funniest comment there:

Still