That's the assertion ARM made.
Yet it seems to me that is is pretty unclear that this is an open and shut case of trademark infringement. This appears to an example of fair-use to me as there is nothing her that would indicate any potential for confusion to the market or harm to the brand.
Part of problem here is that the incentives support over enforcement, there is little to no legal consequence when companies go after fair use and a lack on enforcement does carry risks of eventually losing the trademark.
However, that doesn't justify ARM's actions here. There are plenty of ways that ARM could have approached this that would have protected their trademark without the loss of goodwill from someone they have a valuable relationship with.
Taking this approach is indicative of laziness and indiffence.