That kind of confused me too but Feld0 cleared it up in another topic here is what he said

This is just the way US trademark law works. If there is written proof that a trademark owner is aware of an unauthorized infringement of their trademark, they must shut it down or risk losing the trademark. If thetrademark is lost, the concept of My Little Pony video games effectively becomes public domain. Hasbro can look the other way and play ignorant for some time, which is the only reasonable explanation for why this just happened, but a single email to their legal department is enough to constitute written proof that they're aware of the infringement. It is a particularly curious detail that two team members left Mane6 shortly before the C&D was issued...

Hasbro has a trademark specifically on "My Little Pony computer games". You can search for the trademark filing itself on the US Trademark Office's website; it has been there since 2002, so it's nothing new. Fan fiction and fan art aren't trademarked, so they aren't bound by trademark law.

 

In other words since fanfics and fanart in this case are covered by copywrite they constitute "fair use" which is not illegal but since Fighting Is Magic is a game which is covered under trademark instead of copywrite it has no fair use if I am understanding what he said correctly.

Source: MLP Fanwork Illegal