That's a bad legal definition. It needs a clarification which usually comes in a form of a contract.
Mojang clearly acted un-professionally: there's money on the table without a clear job definition. What happens with the copyright? Authorship? Should the author be mentioned in the game? etc.
Same goes to the writer, obviously. Even this post sounds almost... Jealous?
The contract they suggested is a standard document suggested to contractors of the kind in IT. This is not "strong arming". The only thing that changes the discussion is the fact that it happened post-factum. And the text author, having seen the success of the game, is clearly not satisfied with just signing the doc.
He mentions money a lot so, i guess, this is root the problem.
Either way. 99.99% of Minecraft players would still play and enjoy the game with or without this text. It's a nice little touch to a brilliant game, not much beyond it.