Somebody said Thing-Thing was a bad name. True, it was a webcomic made by some kids before it was even a game series. It was tacky and childish, but by the time it had become popular it was a little too much too late so far as changing the title to the series. And it's become popular and well known under the name. Thing Thing was NOT based on madness. Madness isn't the first series with armless, legless characters lacking detail and it certainly wont be the last. The whole lack of detail and no legs and arms was just out of laziness. To start off with Krinkels was a poor animator and the characters with no arms are very easy to animate and draw compared to characters with limbs.
Finally, the Thing Thing series has ended indefinitely, no more games of about or relating to Thing Thing will ever be created. Weasel, the creator of Thing Thing, said this himself multiple times on his forum over at DiseasedProductions.net Though he still makes other games and such. I sincerely doubt you would need a team up to make such a game, because both teams contain that make Thing Thing and Madness official games have a person who does each job. Assuming they actually did team up, they could each do what they individually do best. But that's already happened during the creation of each game, people from both teams did what they did best for each.
I would love to see how it turned out, don't get me wrong. But the chances are slim and hypothetically assuming they did team up you would end up with a very strong team. But whatever they made, would probably not be too much better than project Nexus. It's really as good as games get. Maybe they could make something longer with more cut scenes and such and perhaps an awesome new storyline. But when it comes down to it, it'll be like a CoD to CoD2 conversion. I.E. Not much different.