The main thing that companies think about before Ceasing-and-desisting is whether they are getting hurt in the wallets. Let us talk about
Chrono Resurrection - Wikipedia, the free encyclopedia
Which was going to be an amazing recreation of Chrono Trigger. If this would have released it would have been great and any remake from Square Enix would have to compete with this free game. So people would think "Hey what should I get, a free clone that is awesome, or a 60$ game that's just a tiny bit better?"
That's when companies step in. Other companies will be more leniant, but you get the picture.