No. They are (well, briefly were) distributing it under new terms, which meet all their obligations under the plain MIT terms. You fundamentally misunderstand how licensing of copyrighted work works. Read the text of the MIT license and observe how the new terms don't contradict them. This is specifically the purpose of the MIT license - to allow incorporation into more restrictively licensed works.

They don't own copyright to the code, its respective authors do, but they have a license to it (MIT) and are free to distribute and use the code as long as they meet the requirements the license puts on them. Which they do.

That this whole shitstorm was monumentally stupid go-proprietary-in-a-fit-of-zeal is another thing.