Well guess what?
IT FINALLY GOT UPDATED!!!!!!!
HERE are the changes.
I figured the reason why they didn't DMCA them was they weren't finished with it yet (the 5 versions were 'betas' basically). And so they didn't hit them with it until they were done. Note they already had an update in development before the DMCA got dropped on them. Best of both worlds. The game comes out, but Sega protects its IP.
This is all based on my understanding that copyright law basically says "Protect/Use it, or lose it", I could be wrong.
EDIT: I asked a lawyer friend, he says my assumption is correct.