Threads Software Limited says its lawyers have informed Meta that it will seek an injunction from the courts if the Facebook parent keeps using the name Threads...
I think that's neither. The whole thing boils down for me to an adult trying to strike a deal with a kid so the kid gives up their ice cream, the kid saying "no!", and then the adult still grabbing the ice cream by force.
In other words I think that Meta run some risk assessment on the move, and decided that it was still profitable.
Considering that Threads was not trademarked by Meta before their launch (or, at least, isn't listed on their Trademarks page ) it is a massive fail on their legal department.