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It's very easy to panic when Amazon sends those letters because they will not reveal who is claiming the rights on the other end. It could be someone showing a contract saying they are the ones with the right to publish. If she had already been publishing it on her own, that is STILL possible. The problem is that Amazon won't tell her--they will ask for proof that is pretty hard to provide when you don't know what you need.
I doubt she's using it for publicity, although I don't know the author. She's probably just screaming in panic and after having had problems with ARe, she may just be pointing the finger early. Just making that claim is hardy enough to provide publicity. I could write sob stories on my blog or visit other blogs and leave sob stories, but that isn't likely to generate "buying" publicity. The readers have been taken in this scenario as well so just mad speculation doesn't buy anyone anything.
Other authors have gotten that letter and it can take WEEKS to straighten out. It simply isn't a high priority with Amazon. It's much easier to take the book down.
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