I don't see where you've read that they accepted donations. Every article and Reddit post I find says they didn't? It was indeed releasing on Steam for free, but I don't know if they had contacted LEGO before doing so.
Also, this wasn't the only Bionicle game that LEGO had endorsed, Quest for Mata Nui too, which makes this even more of a heel-turn. They won't have to shut down that one, though: the team went silent and then the main dev passed away.
I did, actually, because on my phone it's in a burger menu hidden below the Internet Archive banner; thanks for pointing that out.
I see the project itself didn't accept donations but they pointed visitors at each dev's personal donation page, with no guarantee that it would go towards the project. I can see legal thinking that's bullshit, although I'd be surprised if most of those hadn't already been setup by the time LEGO originally gave them the ok.
Also, this wasn't the only Bionicle game that LEGO had endorsed, Quest for Mata Nui too, which makes this even more of a heel-turn. They won't have to shut down that one, though: the team went silent and then the main dev passed away.