I don't even know where to begin....
The one thing I am upset with is the deletion of your Incident Zero project (I was looking forward to) and the fact you see using sprites as theft. It's ONLY theft if you took/charged money for your work. Mugen is generally free so how is a fan project that is free theft or cost any company money? It doesn't.
I am sad/upset with your line of thinking. I can tell you are having some sort of life crisis, and I know making sound decisions in that head space is a hard thing to do. However the choice you made seems like a permanent one with you deleting all your projects and other "pirated" stuff. So with that, I wish you well in your life, but I hope you don't start moral posting about other people's mugen projects with talking points about theft or morality of using sprites or music.
As a Touhou and Mugen fan I am extremely disappointed to see this post and the reasons behind the decision....