Have to agree. How damn stupid can they be? That's all user created content. Mojang has no control over what some fan creates using their game and no control over what they name a video they put up on youtube either.
This seems kind of like stupid territory but I don't know how it works.
If someone (say Warner Brothers and 5th Cell) put a game (say Scribblenauts) on Steam, and a fan makes an item called "putt putt club" or "Super Mario", maybe that violates some sort of trademark since the item was created without permission.
But who is responsible then? Are companies who provide content creation tools responsible for policing it? Is it only the case if they host the items, like Scribblenauts? If that's true, then in this case it seems like a parallel to someone using Photoshop to make a picture using the Putt Putt logo, putting that picture in a YouTube video, and then a legal complaint being sent to Adobe about it.