Just because someone says what they are doing is legal doesn't mean it is. IANAL so I don't know but the source files have Blizzard's copyright warning in them
MS will change nothing.
https://github.com/galaxyhaxz/devilution/commit/bb01c6f084b8...
In fact, when you wrote your comment, those notices were still there, so you have no excuse for writing such an ill-informed comment.
It will be interesting to see what happens on Blizzard's end. I won't be surprised if the repo gets DMCA'd. It's not a big deal to me either way, I did this for the learning experience.