Silly is irrelivant.
They own the trademark to "Mushroom Jig Head", and they claim that he is infringing upon that trademark using "Mushroom" with any related product.
While I think the claim is stretching, they are well within thier rights to defend thier trademark (that;s the whole reason you get them).
He has two choices:
1.) change the name
2.) argue it/defend his usage of it and why it does not infringe, or why the trademark they have chosen is indefensible (claim that the term "Mushroom Jig" is synonymous with the head style so as to make it a generic term for the shape/style of the head, etc...)... but those things cost money... probably alot of money for a "side line business".
They have no choice but to defend the trademark, because if they do not, the eventually lose the ability to, and then the mark becomes useless. IOW, if they let him slide, that becomes evidence for the next guy to slide, and so forth.
And, the mold that is sold by by Do-It is a "Worm Nose Jig" - not a "Mushroom Head Jig"...further backing up thier claim (took me forever to figure out that was the same darn head!)