P4rgamig is a scam site, the article is completely fake.
Even if it were true though, it could simply be to get a point across. Microsoft doesn't want to play fair, so this is Rare's retort. Either way Microsoft would would lose, as allowing him to commit suicide would leave a permanent mark against them, and letting them go free would do the obvious. Not that it's right to threaten someone with that sort of thing, but if it gives them a much bigger chance of being able to return to their original creative integrity, then they would at least be doing it for a just cause.