Here is a pretty concise recitation of the facts from a Berkely news website:

William Flint II, who called himself Kim, had raced down the same hill on June 6 in 2 minutes and 7 seconds, reaching a top speed of 49.3 miles per hour, according to his twitter posts.
“49.3 mph, on a bike. How I find religion on Sunday morning,” wrote Flint on June 6.
“Set new personal records – Centennial, 3 Bears, some others. even a KOM (King of the Mountain) on south gate descent!” he added a few hours later.
But on Tuesday June 15, another bicyclist, Pan Thomakas, bested Kim's record by 4 seconds.

Flint died on Saturday June 19th. Short of taking a day off of work, Flint tried to take back his record at the first opportunity he had.

Even the family's lawyer acknowledges that Mr. Flint is primarily at fault and that Strava is only partially at fault. This doesn't sound like a money grab to me. I think they are trying to force Strava to change its policies (and not just the TOS, which was changed the day after the suit was filed).

Keep in mind, it has now come to light that the cyclist that killed the pedestrian in SF was also trying to beat a Strava record at the time of that accident. By encouraging its users to break records, Strava is essentially promoting time trial races on open public roads and trails. If Strava doesn't change itself, the courts or the legislature will force it to change.