He is defeated much more ignominiously (and hilariously) by Berserker Kale in the manga, as his enormous size causes him to stumble out of the arena after Kale delivers a single kick to his abdomen.
There's very little information out there regarding the design process behind Anilaza. Many have labelled him a hodgepodge of various Toei-made monsters from days past, most notably Hatchiyack, whom Anilaza definitely resembles the most:
Anyway, onto the main point... Anilaza's design doesn't make a huge amount of sense. Three out of four of his component parts are robotic fighters (seemingly the only warriors from Team U3 to be fully mechanical), with the last being their mostly non-combatant humanoid creator. Anilaza resembles none of them at all, and although he is described as having mechanical features like a reactor core (a weakness that #17 instinctively exploits during their battle), he seems more organic than robotic.
Furthermore, Anilaza is somehow powerful enough to overwhelm the entire Universe 7 squad in a beam struggle until #17 scores that critical hit. Even Jiren steps in to stop his wild energy blasts briefly. While the tin-can robot trio were pretty damn strong, enough to put Ultimate Gohan on the ropes, it's hard to believe that adding in a relative weakling like Paparoni would really tip the scales enough to turn him into an unstoppable monster on par with the two strongest universes combined. So what gives?
Let's dial things back to before the beginning of the tournament arc. When Universe 3 were introduced, they built up the character Nigrissi to be the team's leader and most powerful warrior, as well as the one who modified all of the other warriors. Looking at Nigrissi's design, there is definitely a resemblance between him and Anilaza. They both have noticeably alien designs and similar colour schemes. Anilaza basically looks like a beefed up, kaiju-sized version of Nigrissi. It was frequently foreshadowed that Universe 3 had some kind of final card to play in the tournament through vague remarks, like when their Kaioshin boasts that Potara fusion is unnecessary (not least because most of his fighters don't have earlobes ). As Team U3's champion and a genius scientist in his own right, Nigrissi seemed destined to take this role.
However, that's not what happened. Nigrissi ends up being one of the first U3 warriors to be eliminated, as he's taken out with zero fanfare by Cabba of all people. Base form Cabba. Who wasn't even looking at him when he backhanded him off the stage. Ouch. Not only that, Nigrissi's prized creation Narirama also gets an embarrassing elimination courtesy of Hit and Basil. This gave Universe 3 a perceived jobber status not helped by their comedic personalities and designs, though in reality, the other Universe 3 fighters have a surprisingly decent performance in the anime.
I believe that somewhere along the line, some of the animators or directors made a blunder. If we consider that Anilaza was always on the cards, it seems only natural that Nigrissi would be the one to transform into him. But for whatever reason, someone mistook him for a generic fodder character (easy mistake to make in all honesty) and clumsily slotted him into Cabba's establishing scene, necessitating that the team's other mad scientist Dr. Paparoni take his place as the one who merges to become Anilaza during the endgame of the tournament.
Further evidence of this: while I've not seen any footage of this, apparently Anilaza makes an appearance in the arcade game's version of the Universe Conflict arc from Dragon Ball Heroes, where he appears as a separate being from Paparoni. That may not sound like a big deal considering the fact that various versions of Gogeta and Vegetto have met in that game, I don't believe it's commented on so either Bandai Namco forgot about Anilaza's anime origin, or they were going with what may have been the original concept behind him.
All things considered, while I can acknowledge that he's possibly the most conceptually botched up character in the entire arc, I don't hate Anilaza. It was entertaining to see the Dragon Team fight a giant kaiju with buckets of nonsensical abilities. The eventual joint beam struggle between them was a legitimately iconic scene for me. It's the sort of untamed madness that the Tournament of Power setting was built to showcase.
But anyway, what do you think of the theory? Convincing, or was Anilaza really nothing but a last minute rush job?