The articles I've read really are vague on that point, unfortunately. I'd love to know what the process was. I'd be surprised if it was a straight-up filtering or downsampling. There are differences in some of the details (proportions, angles, placement) that make me think it was probably done from scratch as pixel art.
This doesn't seem like something you achieve by throwing a filter on a photo in photoshop, and anyone who has done pixel art will tell you that after looking at the image for 5 seconds. While I can't speak for the artist, it seems unlikely that the original photo was used as anything but a reference.
It's the photographer's failure (or more likely, refusal) to understand this process that drives the legal action being taken here. And since, as Bit Shifter said, this debate never even happened due to the monetary dynamics of "Fair Use," it's pretty obvious the legal system is what's ultimately at fault here, and anyone who thinks otherwise is kidding themselves.
Any system which places the burden of proof solely on a defendant by default is inherently corrupt. The fact that an incumbent need only raise his/her proverbial fist in protest of a perceived infringement is patently absurd. It serves only to discourage further creative work and entrench and monopolize past work at the expense of future artists and individuals.
