One thing I've always wondered about projects that legitimately do get shut down because of legal bull**** is why it seems like no one ever goes ahead and finishes things up in private anyway, even if it's just to pass around to a few friends via closed downloads. There's obviously no stopping that particular method, and at least all of that work doesn't go to waste. Then maybe you wait several months to a year, maybe the mod "appears" on some file-sharing site, and voila. No way to prove that the original team authorized the release or even created the content themselves, so the fans get what they want, and the lawyers don't have any recourse.
(Obviously, I sincerely hope that nothing like that will have to apply to Diaspora.)