Interestingly enough, in the email explaining why the item had been removed was an additional blurb about the confidential nature of the email... To me, this is the strangest part. When I asked why it was confidential, this was their response:
"This is a legal matter and out of respect to the person that contacted and to the Etsy members affected by this issue, we request that you refrain from discussing this issue in the public forums. As well, such discussions could result in "calling out" or specifying private information which goes against our Forum Dos and Don'ts."
So, I guess I'll be making some things as give-aways only now. Trademarks don't stop you from making something, just from selling it, right?