ReactOS

The whole "inevitable lawsuit" stuff has yet to even be mentioned and ReactOS has been around for a few years now. There's nothing that would necessarily even call for a lawsuit--they use Microsoft's own API in development.

They're not using any Windows binaries or anything like that--at most they're mimicking features in the style of the UI. That's pretty much it, and Linux distributions have been doing that for God knows how long.

They're not just mimicking UI style - they're making a binary-compatible API, which is remarkably similar to a private server. I am not a lawyer, but I think Microsoft would at least have enough grounds to initiate a lawsuit, if not to win it. But MS probably won't care until ReactOS actually becomes a threat to their market share.