I won’t (not) speak for @Lady5tark, but by not providing specific guidance on the issue, Woot avoids the risk of being wrong. As noted, anything which blatantly violates a copyright or TM will be rejected; beyond that…who’s to say where a trademark ends and art/parody begins?----certainly not Woot (anymore). By virtue of Woot’s decision NOT to be the judge on this issue, the risk of infringing on a protected mark remains on the artist (which, of course, is further set out in the contract signed when a design is submitted).
Based on your post, it appears Woot previously took an ultra conservative approach of rejecting anything that could violate a mark. This not only limited the artist’s designs, but it also limited Woot’s profits. In addition, it placed a heavy burden on Woot to scrutinize each design and make a case by case judgment call on every shirt. As Woot scaled, this likely became both unsustainable from a resource standpoint and undesirable from a business perspective. Further, as digital printing evolved and “print to order” became the standard, there was much less risk if a C&D were received. Woot could simply stop printing the shirt; they weren’t stuck with the screen print set up expense and a large stock of printed shirts which could not be sold.
So Woot (correctly in my opinion) sits in the sweet spot; accepting all but the most clear ripoffs and pulling a design immediately upon receipt of a valid challenge. @Narfcake can correct me if I am wrong, but I think that in the tee shirt game, there is actually very little enforcement as reflected in the fantastic array of “pop culture” designs available here and elsewhere. Of course, I’m sure there are some owners who are overprotective of their marks which may explain the absence of designs which you may otherwise expect to see.