Intimidation isn't illegal, they weren't threatening to break his kneecaps or anything.
I would not definitely not say "intimidation isn't illegal", because it very frequently is, albeit the US tends to allow a great deal more than most developed countries (including the UK). This particular form of intimidation skirts the law by being implication-based and relying on semi-legal threats (often fanciful but the people they're being directed at rarely know that) rather than involving illegal verbal threats or the like, but by engaging in it, you're getting into very murky waters that risk significant reputational damage. I would suggest that potential for reputational damage - which people will long remember because it's sensational - continues to mean that it is always a bad idea if your company having a positive reputation matters (which is not the case for some business, but very much is for WotC). WotC indeed suffered reputational damage in this case - but it was small compared to what it could have been had the person involved not been pretty amenable.
I think the bigger issue it illustrates is a general lack of coherency of thinking, foresight and real care for WotC's reputation and brands in WotC's corporate layers (rather than say, within the D&D or MtG teams). WotC are B2C not B2B and I feel like they sometimes forget that. Or forget that the C (customers) exist at all or even have volition (again talking WotC corporate, not the actual D&D team - but the former overrule the latter). It's that lack of real consideration of their own brand that has lead to it being so damaged that, really
at best people are putting "neutral" on WotC, despite having two extremely widely enjoyed and successful game lines (D&D and MtG).
I suspect the heavy Microsoft influence here is part of the issue - Microsoft's culture is one of "You will buy our products regardless, so we will simply do as we wish and you will comply", and that's getting stronger, not weaker. Anyone who has to work with them in IT will have seen that, more almost any company, they simply make changes or major decisions and then expect you to deal with them, often with limited or poor support. This impacts individual customers too - Windows 10 and 11 are far worse for people with dyslexia, ADHD and a number of other conditions than earlier versions, because Microsoft simply decided to prevent you from being able to selectively change background and text colours in Windows, and indeed stopped a lot of coloured overlay software from working at all (or forcing it to operate in ways that made it be far less beneficial). The reason they did this was strictly visual branding based - they wanted to prevent users from making Windows look "bad" by customizing it in ugly ways (this was outright stated). They did actually respond when multiple dyslexia organisations criticised them - they were extremely high-handed and stated that because their built-in screen-reader (i.e. text to speech) worked better in Win 10/11, people with dyslexia have to use that, rather than re-colouring stuff, even though that's obviously serving a completely different role, and completely impractical. Oh well, I guess there's still taping a bit of coloured transparent plastic to your screen. Microsoft do change course sometimes, but only when there's massive backlash, and they're always shocked pikachu about it, no matter how obvious it was.