It depends, as you're allowed to be as experimental as you wish, as long as you fall under certain parameters. It's more of basing a game from Yume Nikki rather than ripping it off wholesale, but that's acceptable too. There's a lot that can be done with the genre of "open world look n' find" & "real world -> dream world -> real world -> dream world (and so on like Fleshchild)" that you can theoretically make a Yume Nikki fangame that's only an echo of the original. If those parameters don't satisfy you though, it's all good and you don't have to participate if it's not your style! Good luck, hope this cleared it up a bit c: