Activision most likely asked them to cease and desist, possibly at the request of Sony. The intent of the spots was very clear and a legal battle would have been pointless. I'm sure they never intended to argue if Activision protested.
Personally, I don't think this was a very good idea. They risked straining their relationship with Activision, which is obviously very valuable to them. They also look more than a bit hypocritical, as exclusive advertising deals are something Microsoft has invested in heavily. It could even be said that the move is one of desperation, as they attempt to slow down the Playstation/Destiny juggernaut.
I don't see this as a big deal in any shape or form but I think Microsoft comes out of this looking a bit worse than they did before.
