That's a little black and white don't you think? I've always interpreted it to be a context driven thing.
c) the "white out" method is not what WotC intended, the PI usage is a list of terms that you are reminded not to use in the same way that they are used in the same way they're used in the books. "Displacer beast" for example could refer to a variation on the Yeti who's attack teleports you 3 miles in a random direction.
You'll notice though that most of the PI listed in things rather easy for WotC to defend. It doesn't list 'Hades' it lists 'The grey Wastes of Hades'... not Arcadia but the 'peacable kingdoms of arcadia'. etc.
And nobody before WotC has ever described the gray kingdom of Hades as a "grey waste", nor has the usually-monarchic often-paradisic land of Arcadia ever been described as a "peacable kingdom".
Obviously, WotC expects those phrases to be more defendable than the bare names. But i question whether they're really all that much better. In trademark, you generally can't get a trademark for a simple descriptive--thus the proliferation of invented words and terms, and specific names. Most of the names for planes that WotC has listed as PI are pretty much simple descriptives of the common PD vision of the place. Not saying that trademark law necessarily applies to PI, just that it's the closest we've got when it comes to standards for short phrases and words.
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woodelf <*>
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