My only concern is around the lack of ability for businesses to respond or request any level of verification that a person actually did business with them. The BBB at least contacts the business and oversees a process for resolution (documenting the entire thing). I personally know multiple business owners who've dealt with threats from customers who will go and write a bad review if they don't simply bow to demands.…
I think it is quite reasonable for Yelp to note when merchants use the third option. As a consumer reading reviews, I learn slightly different things when I see:
A: Three good reviews and one bad review; the merchant responded to the bad review and their response sounds well-reasoned.
B. Three good reviews (one deleted review, but I can't see that) and one note from Yelp stating that the merchant has used the legal system to suppress reviews.
I do think it is important that since Yelp (not a customer) is making the statement that the legal threat was used, that Yelp take reasonable steps to ensure the legal threat actually occurred. Otherwise, a malicious user could falsely report receiving legal threats from a business as a way to harm their reputation.