Apache doesn't enforce copyleft, so the Pear authors can license whatever changes they made to Continue with any license they want.
What isn't ok is to change the license of the existing code. They seemed to have corrected this since[0]. I think it's very hard to argue they didn't comply with the Apache license in this case, especially since the license is technically included in the forked git history.
On the surface this just seems like it was a naive and sincere mistake. I doubt that the Pear people were trying something nasty.
It also seems one of the founders has a fairly popular YouTube channel, so he's probably aware that this sort of nothingburger drama is great for business if handled competently.
[0] https://github.com/trypear/pearai-submodule/commit/335436b47...
