Also, we might get some good case law if this actually goes to trial.
As for the cease and desist: they want them to stop infringing - what do you expect? That they will say "we are suing but they are welcome to carry on doing what we are suing them for".
I do not know what you find astounding. If these remedies were no available, you might just as well abolish copyright law as it currently exists.
However, I think FSF is taking a big risk as well. The original demands, pre-lawsuit, were already rather severe and in the case of notification, silly. No one goes to that much effort about a product recall unless it is catching fire or something.
I understand that FSF is trying to prove a point, and a valid one, but I also fear what will happen now that someone has finally called their bluff.
The defendant (Cisco) gets to deduct "the elements of profit attributable to factors other than the copyrighted work." (17 U.S.C. § 504 of the US Copyright Act).
I imagine if you take the profit from a single revision of a firmware image and subtract everything that is not attributable to the Readline library (for example, named in the complaint) you can safely round that down to zero.