From a legal standpoint, as far as I know, blizz has not opensourced any of their code, so its safe to say that Nostalrius has no Copyright over the code (AS FAR AS I KNOW, i am not entirely familiar with the facts).
That beeing said, in theory, there's nothing Nostalrius can do except "ask nicely" as they have no legal claim over code that is not their intelectual propperty to begin with.
Its like you steal a car, then u borrow the car to a buddy, and that buddy keeps. Now can you go to the cops report "your" stolen car as stolen? nop...
WOW belongs to blizzard, as far as I know, they have not released any rights or ownership to anyone. So Nostalrius can't really do фекал to Elysium, from a legal point of view.
Assuming these are the facts.