The legal challenges were at very different points in their lifetimes. It's at least arguable that the legal issues associated with AT&T and BSD kept it from becoming as mainstream as it might have. (As did the somewhat splintered community.)

Linux OTOH was already well-established before the SCO suits.

I think BSD's biggest problem was all the fragmentation that they created for themselves, with FreeBSD and NetBSD and OpenBSD (and more).

BSDs legal challenges happened largely before Linux had any popularity, so the narrative that pins the blame for BSD's failure in the marketplace on its legal troubles seems hollow to me. The biggest lawsuit was settled in 1994, when Linux hit version 1.0 and Red Hat released its first version. FreeBSD 1.0 landed the previous year.

I don't really disagree. As you say, the legal issues with BSD had been largely resolved by the time there was a significantly growing market for x86 *nix. (It's also worth remembering that, at the time, a lot of people were assuming that market would just go to Windows anyway.)

I'm also inclined to think that fragmentation was a big part of why BSD didn't win out--not legal issues or licensing.