Good Faith can be argued, but the argument would have to take place between the person who purchased in good faith, and the copyright holder. Probably in front of a judge in many cases, if there's no easy agreement.

A copyright holder gets to decide who does and who doesn't get content and under what circumstances or conditions (within the framework provided by law).

For Linden Lab's part, they either comply with the takedown and derive some basic immunity, or challenge it (the latter being a potentially costly process) and risk some liability. Granted, that's a bit of a simplification, but it's a workable guide.

Some have argued that this is one of the principle flaws of the DMCA; for example, the EFF co-founded by Mitch Kapor (ex-chairman of and currently board-member of Linden Lab) has argued this point on a number of occasions.