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Any reason given? Not that they have to give one, it's still their property to do what they want with it. I would keep an eye on them and if they somehow in the future come out with something very similar, I hope there are good records of the past years of work and discussion. Since it was going to be free and not for profit, not really a case for lost income, but there must be some laws to protect people working in good faith with a trademark knowingly who get their ideas stolen FOR profit. If that happens.
No reasons given. And up until the cease and desist, the team working on the project was in good standing with LEGO.
Keep in mind, there currently isn't any existing LEGO Bionicle theme. No official merchandise is being sold. There exist literally not a single official ongoing Bionicle project from LEGO (as far as the public is aware). And it has been like that since the cancellation of Bionicle G2 back in 2015.