As of Pixelmon 9.0.9 for Minecraft 1.16.5, the config option for allow-vanilla-mobs no longer fully re-adds vanilla mobs to the game, in favor of the new datapack system.
This datapack will solve this issue for you, so you can find all mobs as if it were vanilla, while also keeping in the Pokémon.
This is NOT an issue with the datapack, this can only be changed on your end. However, here is the fix.
Pokemon that are spawned will add to the 'peaceful' mob cap of the world. If that cap is reached then no mobs like sheep and cows will spawn.
Essentially you need to either decrease pokemon spawns, or increase the mob cap.
The decreasing can be done through the normal Pixelmon configs, but increasing the mob cap is probably what you'd want to do, albeit slightly harder.
What I did was added this mod (made for 1.16.2 but it still works): https://www.curseforge.com/minecraft/mc-mods/increase-mob-cap
In the mod's config you can set new numbers for the cap, just increase the 'Creature' cap and you'll be good! You might need to up 'Water Creature' too but I'm not totally positive there.
Just note that there's 2 places you need to change the config, one is the normal place you usually find configs, and one is in the world's folder itself, either 'worldconfig' or 'serverconfig'.
You'll probably have to mess with the specific numbers a bit. In my experience, 50 is a good starting point for singleplayer.
While this was made for 9.0.10 Pixelmon, it should in theory work for more recent versions that come out. Regardless, I will try to keep on top of this in case any major changes are made. There was a change in 9.1.0 that I haven't fixed yet, but should only affect piglins and rabbits.
Note: In the current version of Pixelmon, you may still need to turn on allow-vanilla-mobs in the config, as this change isn't fully implemented yet. I am not 100% positive on this, but if it doesn't work without the option on, then try that.
