Unless ZLUDA can show that it is a clean room re-implementation from a spec without contact with the CUDA libraries, it would be a bad place for AMD to place themselves. That could be reason enough to retract voluntarily before any bad press. Such a thing is possible but likely much harder than Compaq re-implementing IBM PC BIOS.
Did they? Sounds like AMD did that[^1] and that the project is continuing based on the pre-AMD codebase[^2].
[^1]: https://www.phoronix.com/news/AMD-ZLUDA-CUDA-Taken-Down
[^2]: https://www.phoronix.com/news/ZLUDA-Third-Life