Something mentioned in a different thread reminded me of a bit in SF Debris' review of the TNG episode "Holo Pursuits." So to put it as it would pertain here, the holodeck allows you to create fully functional creations of character from various media. This would encompass being able to create individuals designed to look roughly how they would look in the original media, translation to three dimensional person aside, or recreate them based on an actor/actress who portrayed the character as desired.

Now the question is where do you think the line would be drawn on where it becomes problematic to make holodeck versions of individuals for personal satisfaction? For obvious lines take it as written that having open permission or consent is fine, example I suspect if asked PokemonGirl or Stepford Crimson would probably be okay with their OCs being used in private stuff so long as money isn't being made off of it if someone asked them, And despite an individual's opinions on the rationality of the law, we'll go with legality superseding ethical acceptability in situations where that might come up.

I think the more problematic aspect of the holodecks - and one that's basically sidestepped by the source material - is the degree of sapience of the inhabitants. Would making a bunch of simulated personalities to hypnotize and toy with not be pretty awful if they actually had free will to begin with? Like, we know that it doesn't take much to make a holodeck character to go rogue and gain free will, so isn't a bit... questionable?

I'd say that unauthorized x-rated holo-characters are the futuristic equivalent to people today writing erotic fiction about celebrities. Not illegal, but definitely very creepy.

Of course, with a holodeck, you're also running the risk of your creepy fanfic spontaneously becoming sapient, announcing its existence to everyone you know, and attempting to make contact with the person it's based on. Pretty strong incentive to stick with procedurally generated models, if you ask me.