Valve has made attempts to take down projects that follow those rules. TF2Classic is the example that comes to my mind since it’s the main one I’ve played, but I know there are several others. In TF2C’s case, they tried contacting Valve to find out why they’d been hit with a C&D, never heard back, and eventually quietly resumed development.

Some kind of miscommunication between legal and the devs? Maybe internal drama? Maybe they didn’t really pay attention and still aren’t aware TF2C is back up? Who knows. Still happened tho.