This is exactly correct. From its terrible work culture and now this, it seems like legal action is only a way of intimidating present employees to toe the line

This is exactly correct. From its terrible work culture and now this, it seems like legal action is only a way of intimidating present employees to toe the line or else face expensive legal action. They most certainly don't want to risk losing the opportunity to have a non compete at all (because right now they DO have that option and have absolutely no regulations on it).