The problem is that the Valhalla licence applies to a different codebase - presumably one derived from Diku, but from an earlier version. There were discussions some years ago about re-releasing Diku under a different licence, but a member of the FSF said such a thing wouldn't be possible without getting permission from every contributor. As many of these contributors have vanished into the mists of time, getting such permission was obviously not possible, and as a result it was determined that the licence conditions couldn't be changed.
In the case of Medievia, the issue is further complicated by the fact that they're based on Merc, which is a Diku derivative. Even if you were to overlook the FSF's claims about the contributors, the fact still remains that the Diku team have no rights over Merc.
However I do agree that from a goodwill perspective it would be a fine gesture, particularly if they also restored the Diku and Merc credits and apologised for lying to everyone for the last decade. I do wonder what sort of knock-on affect such a legally-invalid special-case licence would have on other Diku muds though...
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