This only tanks the reputation of Mullenweg himself and his WordPress hosting company. WordPress powers about 40% of the web - it is too big to fail (as of now).
I am only looking at this from the outside but given that Wordpress.org (not the wordpress hosting company wordpress.com) is involved here, it's clear that this dispute involves the Wordpress project itself and not just the commercial Automattic entity/Matt Mullenweg.
> The abbreviation “WP” is not covered by the WordPress trademarks and you are free to use it in any way you see fit.
and
> Similarly, a business related to WordPress themes can describe itself as “XYZ Themes, the world’s best WordPress themes,” but cannot call itself “The WordPress Theme Portal.”
[0]: https://web.archive.org/web/20240901224354/https://wordpress...