Image shamelessly linked from GameFAQS. I'm not seeing much that screams "castle" here, save for the faux family crest with carrots on it. And never once does Yosemite Sam fire a gun in the game. Not once. False advertising, or just paying homage to a lovable, idiosyncratic cartoon character from a bygone era? You decide.
Licensed properties can be a tricky beast. If you pay for licensing rights to a property, chances are, you're not going to have exclusive rights to that property, or your rights won't cross all borders. Your licensing rights will expire at some point, and you'll have to weigh the pros and cons of paying to continue those rights, or let them lapse. Sometimes, the window of opportunity for a licensed property is relatively small, and you are forced to come up with a product based upon that property in a rather short time frame. Sometimes, the results can be less than stellar. Such is the case with Bugs Bunny Crazy Castle.