I don’t see a problem with that, since Apple gives you 5GB of iCloud storage for free. That’s far more than necessary for Settings and other details and can even include some personal data (like for Notes or Calendar).
If you want to use iCloud for photos and other data, you’ll have to pay a reasonable fee for it (way cheaper than Dropbox and other services if you only need a little storage), but you can use third party cloud storage instead if you want.
This lawsuit sounds to me like picking on the big gorilla simply because Apple has money and that’s who lawyers target, regardless of the reasoning.
(On a related note, the name “Which?” for an organization is ridiculous. I had to read an article about this several times because it was so confusing having a nonsensical “Which?” in middle of the headline and throughout the paragraphs. If I was an editor I’d write it in quotes like I’ve done here to make it clear it’s not part of the text.)