If you are admitting that you are infringing on copyright then we will ask you to either take the page down or we will have to suspend your account. Additionally, we will have to refund all transactions associated with the sale of the infringing content.
You can avoid issues (generally) by not using copyright characters in your projects. Often those who want to reference a copyrighted character without infringing on it will use a parody or something that shares some qualities but is not that character. For example, instead of Shrek you may have a green ogre of different appearance named Shrak.
Under DMCA we generally do not police content for copyright violation, we assume all uploaders are respecting the rights of others. Only when we receive a report do with go through the DMCA process outlined here: https://itch.io/docs/legal/terms#6-digital-millennium-copyright-act
Since you are admitting to violating copyright outright though, (and on a public forum!) then we do not need any additional evidence to see that you are violating our terms of service and thus your account will be suspended if you do not fix the page.
I am not the copyright owner, I am only sharing what I know about how others may have worked around issues of copyrighted characters. As it stands right now though, you are intentionally violating copyright and trying to profit off of it. That can result in a harsher response from the copyright owner if they decide to take legal action. I suggest you update the page as soon as you can, or take it down in the meantime.
Your game is illegal, no matter if its free or not. Whoever owns Shrek (Dreamworks?) can strike you at any time. But it’s only them who can initiate any charges, so if they don’t then you’re in the clear, but you still stay in a legal gray zone.
So the answer is: you’re not safe unless the owner of Shrek explicitly says you are.
I'm not an expert on copyright stuff by any stretch of the imagination, but I feel like outright using Shrek's name coupled with his likeness--and then charging money for it--is probably something of a no-no if the appropriate owners of the IP caught wind of it.
If you look around and look at other commercial parody games, you don't outright see them using the name of the thing they're parodying, right? They usually make some attempt to obfuscate or cheekily alter the name just enough, while making alterations to the designs, too.
