I agree -- the two day thing is NOT law, and Linden Labs would be in violation of the DMCA if they refused to honor your counter notice received after their artificial two day limit.

Hmm. So liability-exemption isn't end-to-end? That's *very* interesting.

Well, you're only exempt if you follow the procedure properly, including the "putting the stuff back up" part.

But one of the problems with the DMCA in this context is that LL's liability really isn't equal on both sides - or rather, they're equally liable if they fail to take content down as if they fail to put it back up, but the former is far more likely to result in damages against the company than the latter. Somebody could quite easily say "LL were facilitating the illegal distribution of my content by refusing to take it down even after requests" and they would have a hard time arguing against that, with a presupposition being that as they didn't follow the DMCA they didn't make an effort. It would also be a straightforward IP case where there is a lot of precedent.

But somebody whose content was crippled when LL messed up the permissions has to sue LL for inventory loss, where everything is a lot murkier and there are lots of ToS items involved which would complicate matters; as far as I'm aware nobody has actually done that successfully, though lots of people shout about it in forum threads.

Not that the average person or even small business is going to be able to do either anyway.