This may come as a surprise to you, but I am not a legal expert. Now that you've calmed yourself down after being socked in the mouth by that much jarring information, allow me to recklessly speculate.
Nike has a case here because people are pissed at them for something they had nothing to do with. They sold a shoe, someone else took that shoe and turned it into the sign of the devil, and north of one person was tossing their Monarchs in the garbage because of it. The 666 pairs sold out in less than 60 seconds.
Where MSCHF has a case is, from what I can gather to be the only important part of the law: precedent. MSCHF released a pair of Jesus Skywalkers a few years back. There was no lawsuit.
Nowhere near the backlash nor publicity the Satan Steppers received, no doubt. These weren't pushed and marketed by one of the biggest recording artists on the planet, either. Yet, I feel like it's a pretty easy argument to make. They've released religious based custom shoes in the past, Nike didn't step in, we kept doing what we always did. There's also the risk of setting a new precedent that could completely upend the entire customization business, which I can't imagine Nike wants to be the face of.
From where I'm sitting this looks like Nike wanting another layer of distance in the moment and nothing more. A move to appease the people who are MAD ONLINE in the here and now. The people who will move on to Dr. Seuss or whatever the topic of the day is and ultimately drop this entirely. Or they'll win and MSCHF will be completely destroyed. Again, I'm not a legal expert. I fucking led off with that fact and here you are, expecting me to know exactly how this shit will play out. Who do I look like, Jackie Chiles?