It's very clear from the story that it's the first one: they're not compliant with the GPL. At least that's what the Stockfish authors are claiming. They're pretty obviously acting in good faith and appear to be correct in their claim. ChessBase haven't laid out their side of the story other than their marketing materials saying "we developed the software in house and it's better than that open source stuff" and I wouldn't expect them to have a defence based on anything other than technicalities. You won't be seeing a blog post from them, because their lawyers have told them to say nothing.

    > which means your customers could give it away for free if they so choose 

ChessBase is selling the software, and they aren’t getting undercut because they are not redistributing everything the customer needs to rebuild it from source. It will be interesting to find out what that is (neural net weights, or whatever) and whether the court upholds that this is not copylefted under the GPL.