This seems quite reasonable to me. They want to protect their brand. They don't want people thinking "Ubuntu is an unstable piece of crap", when what they're running is a modified version that doesn't work correctly. If you want to modify it, play by their rules or remove their trademarks.
"We are currently in dispute with a European cloud provider..."
It might be nice if we had any idea what provider they're talking about. >:|
My bet is OVH
Yes, I read OVH does this. Though I don't understand, for what reasons are they doing it?
This article was partly a warning shot. They most likely just want it resolved and naming names now would just harm that effort. But it demonstrates they are capable of taking public action if negotiations fail.