The people involved in the creation of the Halo Online modification have been here before. This is no one's first rodeo. Quoting from the ElDewrito website: "ElDewrito was created through the hard work of well known Halo fans, developers and modders like DEElekgolo,
Gamecheat13,
Lord Zedd and many others"
Gamecheat13 has received more cease and desists than anyone I have ever met - he was involved in thefts and leaks of Modern Warfare 3 and Black Ops 2 content from PartnerNet. He also hung around the 'Xbox Underground' crew responsible for a lot of the nonsense that was happening at the start of the generation (
https://www.wired.com/story/xbox-underground-videogame-hackers/). A genuinely bad person, time hasn't changed him in the slightest.
More recently, he used flaws in the Windows 10 Store to download a build of Halo Wars 2 that was intended for external testing partners, pull plot information out of the build and attempt to extort Microsoft with it. Later, he attempted to sell the build to the public at large. I can go on and on with increasingly recent examples of shithead behavior - he revealed the existence of a Steam/Win32 port of Halo Wars: DE, which he knew about definitely by legal means and not at all by playing around with the game's backend services.
Lord Zedd was involved in various questionably legal (not at all legal) Halo stuff. He acquired 360 developer hardware and used that hardware to screw around with Halo. Not exactly legal to seek out hardware for which you have no authorization to obtain, pirate a game and decrypt it so it runs on developer hardware, take said game onto PartnerNet and modify it. Also not a huge deal - no harm, no foul - but this is a way of saying that these people knew they would be flying close to the sun and flew anyway.
Considering how some of the people involved have been thorns in Microsoft's side for a long time, the way that Microsoft has treated this matter strikes me as generous, considerate even. An early build of a Russia only title that would later be cancelled was stolen; pulled from the companies web services. The build was not intended to be accessible by the outside world. Said build was an early development build. It contained a lot of Halo 3 content (the Russia only title was not a port of Halo 3). Immediately, the worst people start hacking on it. Years pass. The result is, of course, Halo 3 multiplayer, hacked together to mostly function.
The act is illegal in every way. It's not even a modification of a public build of the Russian title. There are assets ripped from Halo 3 360 included in ElDewrito - the maps used are from the early build of Halo Online but certain other assets were pulled by the modders from the Halo 3 360. There was no serious attempt to operate inside the confines of the law. These are people who routinely do illegal Xbox shit doing more illegal Xbox shit, just this time for an audience.