The issue is definitely not obvious to a non-tech person. It isn't even obvious to me why text-image pairs should be considered, by default, public domain and fully commercializable by any and all.

The bigger point is that in all probability, the client's costs were minor (<10k), and these kinds of bumps and scrapes that happen (and what one needs to budget for) when choosing to to push forward with a large-scale and obviously controversial project.

So discretion (and concern for the project's overall public image) would call for using a feather rather than a sledgehammer here, as I see it.