You'd think it would be obvious that small model figures that are not articulated would not be considered "action figures" and therefore not a violation of some other company's vendor contract, but these are business people and lawyers we're talking about. I suspect the toy company execs and lawyers blocking Bandai know damn well that Bandai's model figures aren't competition in any way, but their egos and territorial obsessions won't allow them to ever admit it.
These are the figures Hasbro is theoretically being protective of:
Hasbro owns Galoob now, and thus the MicroMachines name. These figures are pretty much 1:72, so standing 1:72 figures with model kits could be seen as one licensee infringing on another's turf.
--Jonah