This still doesn't sound wrong to me. You built something. You showed it to them. They liked it. They later liked it so much that they wanted a similar product.
Did they threaten to revoke API access?
Did they threaten to revoke API access?
I don't have a recording to back up my claims of what was said in that phone call, so I chose not include those details.
P.S. did people here believe before this story broke that Facebook would never revoke API access when it is in their strategic interest to do so? What did Facebook say or do to give off that impression? Is this an industry norm I am not familiar with?