TL;DR - Bungie and O'Donnell both went way beyond what they should have done, because of an Activision faux-pas. Everything the OP posted in conjecture cherry-picked and out of context or downright not mentioned by the article.
What the article says, when you read it:
O'Donnell and Bungie bother overreacted and overstepped what they should have done when this disagreement arose but, in both cases, it is Activision's fault. AV could have just used O'Donnell's music in their trailers but decided that they, as the publishing company, would go a different route. Nothing legally was required for them to make this change but they did insult a man in a direct leadership position at Bungie. He went way overboard with his reaction, and then Bungie did the same. Both are responsible for their egregious reactions but is was Activision who, without performing an illegal act, ignored a long-standing tradition and 'unspoken' agreement with O'Donnell.
The problem is the agreement was unspoken, and O'Donnell really did throw a hissy-fit. The other problem was Bungie either had to fire a board member over this churlish display or breach a 10-year, $500 million publishing and advertising contract. If I had to choose between the two you can bet I'd get rid of the malcontent potentially costing me my company, employee base, and product. Forget the fact the owners of Bungie would loose out, the entirety of the employees could have lost their livelihoods. O'Donnells desire for publicity does not outway Bungie as a whole.
That said, Bungie way over-reacted, though you can speculate that Activision pushed them to act harshly as they did. In any case, Bungie legally overstepped what they should have done and were punished for it, as decided by the courts.
English
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I disagree. Assuming creative control over a studio by the publisher is generally seen as a big no-no, not just at Bungie and not just in video games, but everywhere. Activision regularly gets away with it because of how big they are. Bungie should have backed O'Donnell 100% for the sake of their integrity. O'Donnell had every right to be disgruntled IMO. He helped build Bungie from the ground up and is one of the 7 founding members (I.e the reason Bungie likes the number 7). He was trying to protect the integrity of his life's work and the company he built.
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Bungie backed up O'Donnell when he protested Acti.'s choice of music in the trailer. Bungie refused to fire him when he started acting out, giving a 'negative performance review', which equates a slap on the wrist. Bungie only fired him when he became a disturbance and a liability in the department he was supposedly running. That's backing him pretty hard.
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They took over music for a trailer at E3... Hardly taking creative control.
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Have you heard Fight for the Future.... there is a good reason his stuff was slashed out
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Best summary of this situation I've seen so far. No party looked good in this situation, but it paints the picture of Activision having its fingers in this situation but having Bungie (legally) taking the fall for it.