My first thought is yes since any litigation is very difficult on any small organization in both time and money. But would they win if it went to trial? Maybe but it would not matter since the software is open-source. They may win with one company but the next company would grab the source and modify it and Microsoft would have to sue again. It's a never ending situation.

The bigger question is can wordcraft be a replacement for word? No, not in the near future. The software is ALMOST ready. Almost does not count. And given LLM coders inability to give exact results, it may never be. I would not use it until it's ready and that will be years from now.

Also, at some point MS might open-source Office and just sell support. I would not doubt it.

I think the PC era as we have known it is on its way out. The future is AI assistants and never ending subscriptions to services your AI assistant and you can use.