Except, of course, Luanti holds copyright over their own assets and app. Copyright is not something you get when you file paperwork with the government, it is automatic for creative works.

DMCA is punitive to platforms who do not correctly adjudicate the law and self enforce, which is why they err on the side of the claimant rather than the accused (or the side more likely to defend their copyright in court).

So, the law doesn't really favor copyright holders, it favors extremely conservative and risk averse behavior from large platforms, regardless of who would actually win a dispute over copyright.