The Terminal team could have simply asked a Microsoft Linux team member to watch the videos, and then explain the gist of the algorithm without ever referencing any specific code.
Algorithms can only be patented, not copyrighted, and any IP lawyer would tell you that.
Not to mention that Casey's code is dead obvious, totally standard, done-this-way-for-decades, not some sort of exotic thing he invented. Heck, I've personally implemented something nearly identical back in 2000, and I'm pretty sure every game engine console (as seen in Source games) works nearly identically also.
It's so simple that a one or two sentence description is sufficient. Nobody is suggesting that Microsoft copy-paste reams of GPL code. Instead, Microsoft is refusing to listen to a single sentence of good advice, and stubbornly forging ahead with a demonstrably stupid solution.
Nobody needs to copy the code verbatim anyway. The essential part is the algorithm (or the "approach" to the problem), not some sort of specific C++ wizardry or a huge library.
The correct solution can be thrown together in a couple of weekends, it's not something that has to be imported into the Windows Terminal codebase as-is.