Re: So how do they get round the Oracle copyright hammer?
[standard IANAL disclaimer applies]
1) "APIs are copyrighted" question: Yes. The code is copyrighted. But it is also licensed under GPLv2+CPE : See http://openjdk.java.net/legal/gplv2+ce.html . Works fine for JDKs that expect to remain open under GPLv2+CPE (like Zulu embedded), but doesn't help JDKs that don't wish to accept and propagate GPLv2+CPE as a license.
2) "TCK restrictions" question: See http://openjdk.java.net/legal/octla-java-se-8.pdf . While there are very real restrictions on redistribution of (and on what you can do with) the TCK, the OCTLA does not restrict distribution of either source or tested binaries beyond requiring that they meet the license requirements of the OpenJDK source license. Again, this works great for JDKs that plan to remain open under GPLv2+CPE, but doesn't do much to JDKs that don't wish to use GPLv2+CPE as their downstream license.