Reading the FAQ and TFA, this is more about BusyBox than the Linux Kernel.
No, it started with BusyBox, but it's now mostly about the Linux kernel. The BusyBox issues are largely or completely resolved. As explained in the FAQ: "VMware made substantial and good efforts toward compliance on BusyBox. However, VMware still refused to fix a few minor and one major compliance problem that we discovered during the process. Namely, there was a major violation regarding Linux itself that ultimately became Christoph's key complaint in this lawsuit."