I think that they mean that you can't make a "BitCraft" server as it would infringe on their trademark. If you made a "ByteCraft" server with all of your own assets, and didn't mention "BitCraft" at all, even if the code was exactly the same, I'd imagine you would be in the clear.

I'd imagine that by making a "BitCraft" server, it actually wouldn't violate the source code license terms at all, but they are putting you on notice that it would violate trademark and copyright on non-code things, so it wouldn't be legal irregardless of the code license.