It's more complicated than that--the original version of Final Fantasy 1 for the Super Famicom had a much more beholder-looking sprite, and was called the Bihoruda. They changed it to the EYE for US release, with a new sprite with a single eye, and as usual it mutated over time. The Ahriman (Allemagne in FF7) is actually a distant relative of the beholder.
The old Final Fantasy Legend and Final Fantasy Legend 2 for the Gameboy had a whole series of monsters with the same sprite (this was black-and-white and before even palette swaps) and icon that were called 'Big Eye', 'Gazer', 'Seeker', 'Watcher', 'Evil Eye', and finally 'Beholder', with an increasing number of gaze-related attacks with names like 'Beam' (non-elemental damage attack), 'Gaze' (one that cursed and one that paralyzed), 'StonGaze', and 'X-Gaze' (death attack); the last one even had a self-destructive 'Explode' attack that did the monster's remaining HP of damage (shades of the gas spore). As far as I know they never got sued for that one.
Yeah, Final Fantasy as a whole pokes a lot of holes in various things.
E.g., Bahamut as the good king of dragons. Never got sued despite that, and they've kept Bahamut as some
kind of "king of dragons" or other super-powerful force with at least draconic motifs
for essentially the whole series. FFXIV, for example, has Bahamut and Tiamat...who were a mated pair, and Bahamut was the eldest, and apparently wisest, of the children of Midgardsormr before he was slain by the twisted Allagan Empire long ago. Zero legal rustlings, even though this use is probably actually copyrightable by D&D!
I have personally chosen that, should I ever write a setting including dragon-y things, I will use my own name for the Bahamut-type god-king of good dragons. Not just
to avoid any risk of issues, mind, but also because I like to make just a couple little tweaks to the formula.
Or for another example: Mindflayers! There's straight-up an A-Rank hunt (a world boss type monster) in FFXIV called "Mindflayer," and there's a minion you can get called a Minute Mindflayer. The latter even explicitly references "sucking out the brains of men" in its description! Yet not a single lawsuit. (Probably because WotC/Hasbro know that Japanese copyright law might not favor them, and a case establishing hard precedent against them would be extremely bad. Or it could be they just haven't noticed...but I find that a bit hard to believe.)