I don't think Zillow had much of a case before, but this certainly makes it clear that they will not be able to scare McMansion Hell into submission. Zillow, if they want to achieve an outcome they want, will have to press this in court where they will likely lose.
Curious to see the response from Zillow here, though I've already created my Red Fin account and will likely not bother to go back to Zillow.