Sounds fairly benign. Ownership transfers happen all across the web with, to give a few examples, subreddits, social media handles, messaging groups, etc. Why can't Github do the same?
Nobody is giving away the current org - github would just be vacating the old name so somebody else can have it.
This is bound to become a bigger issue in the future as more and more names get used then fall into disuse.
Edit: GH could also be in for liability claims should the original owner re-appear (at least in general, if not this particular case), and would need to check identity of the involved parties and whatnot, which is going to be very costly.