My $.02.
Even though the Glock look-alike is clearly not a real gun, many people will ASSUME that since it looks like a Glock, it is an actual Glock product made as a blank gun. Yes, there are lots of people who are that easily fooled. If it is of such poor quality, and looks like a Glock, this could hurt Glocks reputation for quality.
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A simple cease-and-desist would have been a diplomatic (and likely, effective) move on Glock's part.
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I'd be surprised if this didn't happen. When they didn't stop the lawsuit came next.
BTW Glock is not the only company to vigiorously fight for their copyrighted material. Disney is one of the most aggressive. Try printing up some T-shirts with Mickey on them and selling them.