If I understand correctly, indie developer made Warzone. Then, that same developer bought the domain warzone.com. Then, Activision/Blizzard made CoD: Warzone. Activision/Blizzard trademarked the word "Warzone" and "Call of Duty: Warzone" in June of 2020. Later, in October of 2020, the indie developer also filed a trademark for "Warzone" and had their lawyer send a cease and desist. I'm assuming that the conversation, with more legalize, was "my client owns the domain, their game is literally Warzone, we have the prior historical stand on this name, so pay us some royalties on a consistent basis determined around the percentage of your sales, 0.25%, and we'll go away."
Activision/Blizzard said "Naw, son, we'll give you $10,000 to go away." The indie developer said "no, you make billions, I had the name first and the domain first, that's not enough." As time went by, Activision/Blizzard decided they were done debating and decided "we want that trademark to ourselves, you shouldn't have even disputed it since nobody would ever confuse our two products so you trying to set up the same trademark is bullshit, and for the trouble of us suing you, you need to pay our legal fees."
Ethically, and I could be wrong, I believe Activision/Blizzard is in the wrong. Warzone, as a domain, was purchased way before the trademark by Activision/Blizzard and even before they created CoD: Warzone. I'm assuming, and this is only an assumption, that the indie developer took the steps they did in response to the first trademark, fearing what could happen to them from a cash standpoint. Of course, what that developer was literally afraid of is happening. I don't think anybody should trademark "Warzone," but if that's the literal name of your game and Activision is trying to trademark it, I can see why somebody would be afraid.
Activision/Blizzard should lose. Unfortunately, I don't think they will. I think, and I'm not a lawyer, they'll argue "there's no confusion between the two, we technically trademarked the word first, we tried (in their definition) in good faith to negotiate a reasonable settlement, and they refused to be cooperative." Then, regardless of how bullshit that series of arguments is, they have billions and can just grind this out for years.