I think they're saying Atari didn't threaten them but they both understood that they could have. Honestly it sounds like Atari were trying to be nice. Like "you technically aren't allowed to do that, and we could just set our lawyers on you, but we'd like to not do that while also making money on our re-release".

This seems like a perfectly reasonable compromise to me.

How is "I haven't talked to my lawyer yet but you know I could" not a threat/pressure?

In the same way that "you kids aren't allowed to skate here, but maybe if you do it over there I could just turn around and not notice you" isn't a threat.

"you kids can't skate here" is the threat part.

That's just stretching the definition of "threat" beyond its normal meaning.

If I tell my kids "it's bedtime" is that a threat?

If they say "no" are you gonna let them stay up?

If not then it may not be a literal threat but it contains the implied threat

There is no reason to assume they said that and all the reason to assume they didn't say that.

Reaching compromises with others is part of life. If the question is whether a copyright from 1995 should hold in this case, I would say no. But the world is sometimes not as we may want it to be. So taking that for granted, this seems like a very reasonable and mature resolution.

Indeed. It sounds like they were further pressured to say they were not being pressured.

The types of folks who make reimplemented game engines often do it as a labor of love towards the original. And the best companies often have great appreciation for their modding communities and preservationists. (Witness the good collaborations between some companies and SCUMMVM, for instance.) This may well have been a conversation that was entirely reasonable and respectful.

I just can't believe that given the outcome and the wording of the posts from the project. If there was respect here there would have been no threats. If there were no threats there would be no talk of "balancing commercial interests"