For example, if you wanted to do an illustrated story based on a character Terri Garr played, you can license the character from its owner, but you'll have to change the appearance since she controls her likeness and doesn't authorize its use.
In this case Mattel used a photo of the actress herself in character so there's no question whether it's her or not.
Some clerk or lawyer dropped the ball. It's quite common.
Thanks guys! That does explain it. Amazing that an outfit like Mattel wouldn’t have stuff like this nailed down. Maybe they need to hire more middle aged folks!
PS- nice use of Terri Garr as an example, hubby loves her!