Can you expound on this? Negotiating a settlement instead of litigating is very common and oftentimes best for both parties. Are you objecting to the fact that his proposed settlement not only includes compensation for what was already done, but also includes an agreement for additional purchases?
Practically speaking, the differences that I quoted above are demonstrated via utilization of the legal recourse I recommended to him earlier, or doing things "on the side." That's not the only difference, practical or otherwise ... but, traditionally, you'd notify them of a potential claim, give them time to rectify, and then follow up, as needed and appropriate. If they reach back out to you with something to quash the beef, as it were, then you agree to a formal settlement. There may be a mediator. There's legal representation. Etc. There's legal formality. There's teeth. There are variations to the process, but that's the gist.
Reaching out to someone and saying "hey, buddy, I know what you did, and if you don't give me this, that and the other, I'm suing you" ... well, now that has definitely blurred the lines, at the very least. And if you're asking for "extras" that don't have anything specifically to do with the alleged harm here (like, when he suggested some kind of additional deal for compensation for more stories), then it's even blurrier.
Again, this is why I suggested he reach out to a lawyer. It could/should be a simple thing to take care of if he goes that route. It gets stupid, dangerous and possibly even criminal on his end if he tries to work something out "under the table." He can send them notice without legal representation (though it's easier and safer with it), but from then on, any steps should follow the legal steps.