Well, according to what I've read from Arabic media outlets, the main thing I've heard from Egyptian and Arabic sources is that it's less being emphasized as a religious thing and more of a security-related paranoia thing. Basically, what I've gathered is that old Egyptian dudes are tech illiterate and paranoid, thinking that Pokemon Go will violate personal privacy, collect information, record your voice, and do surveillance on households, which threaten "the Egyptian nationality", based mainly on the fact that people are going room to room with a camera-based app and that conservative Egyptians are very... "protective". There's talk of "security experts" saying that the app can be used to spy on strategic locations and that the CIA will use it to collect their information. All of it's pretty goofy, but oh well.

That's according to this source and this source which are the only things I really found on this on mainstream sites mentioning this. Disclaimer, I'm not Egyptian and I'm not all that great with the language, so take my opinion with a grain of salt. The talk of legislating doesn't seem to be a front page news thing. When it was on the front page of Al Jazeera, it was mostly positive and just talking about it in the context of it being an unprecedented new smartphone trend but also there being some odd incidents in America. Normal stuff. Old conservative Egyptian dudes fear mongering is also kind of normal shit. I mean... Looks like Egypt might not be the very best, like no one ever was. That's all I'm saying.

Anyways, just don't be an asshole to your Muslim pals about this. Muhammad didn't do Pokemon battles, Muslims aren't really talking about this as far as I can tell, this is a Croatian news outlet, and that's all I'm just saying.