So a happy ending for something that should not even have surfaced, but a happy ending only due to the bad publicity created by this nonsense greedy operation.
The sentence “feel free to file a lawsuit if you insist on the demands” doesn't mean you have to, except if you are very susceptible, which seems to be the case for EC's lawyers as the case was closed after the withdrawal of the aforementioned bootleg CD.
So they didn't need to insist by sending another letter threatening the lady in question as she already did what was asked.
I would have done the exact same thing in this exact same situation, except that I don't own any illegal records or films, because I'm a person who think the copyright is really important.