You’re making it sound like it’s definitely the parent who is somehow being cruddy.
Lawsuits over tax interpretation don’t happen until years after the fact and they’re initiated by the IRS.
Alternative explanation: someone’s kid was kidnapped, so they took their taxes to a tax prep person and told them to deal with it. Tax prep person checked the boxes for the credit and submitted the taxes.
Later, the IRS says you can’t claim them as a dependent and that they don’t live in your house without providing an alternative address.
The IRS sues HR block as the agent of the taxpayer and five years later a judge says that you actually can, so the code is updated and a new checkbox added.