Here comes "someone more of a prick" :-)

Your read appears to be correct. Follow it to the conclusion: Theoreticaly, their licenses could be immediaely terminated by any copyright holders of code in the unit who cared to get tough, and then it would be straight infringement for every unit they sold. Practically, nobody would be that much of a prick unless they proved to be incredibly unwisely obstinate. Either a nice warning or a little publicity has been all that's necessary to get people's attention and get the GPL violations fixed, given time. In the case of Empeg, I predict that nothing beyond the nice warning will be necessary.

Thanks

Bruce