I’m not a copyright lawyer, but I feel safe assuming the issue was two pronged.
1) What Pac-Man so kindly cut and pasted for us addresses COPYRIGHTS for U.S. Government works, such as bills and the like. This photo, as the terms of distribution stipulated, “may not be manipulated in any way”, would most likely relate closely to the category of “classified” documents, in that there are special circumstances and guidelines that must be adhered too. I doubt pac-man would claim “classified” documents are also subject to freedom of distribution and manipulation.
2) As I pointed out above and DY so kindly reiterated, when operating in a secular society, one must be mindful of the messages our actions send to the general public and what their reactions will be. Otherwise, we run the risk of having a chillul Hashem occur C”V.
Side note which is a different issue but relates here, Rav Nebenzhal of the Old City of Jerusalem holds that on an airplane one should daven in his seat instead of standing in the back of the isle as part of a minyan, since it disturbs the flight attendants and the passengers around them who may not share their enthusiasm.