That seems like pretty fucking cut and dry harassment. Guy didn't make any libellous claims.
I hope they can get a damn good lawyer with some help from EFF or something. Would love to see Funko get torn a new asshole over this, especially since he claims it wasn't even copyright infringing material but a fucking fan forum for an official funko branded game that got the site improperly flagged.
a domain registrar removing your name registration means that name doesn't go to where your site is anymore. It would be like a phone company disconnecting your number. People will call the number but not get to you. You will still have your phone (and maybe you are still reachable on a mobile because it uses wifi instead of the telco or something)