Apple doesn’t fear Epic’s lawsuit for the merits of the lawsuit itself. Apple fears how Epic can use their devoted base of video game players to create a PR frenzy that turns the lawsuit into a popularity contest.
The more damning implication is that Apple, one of the world's most highly valued brands, a brand name that has historically commanded 50%+ gross profit margins on commodity goods sold as luxury goods, is losing a 'popularity' contest to a video game company. Talk of changing times!