A friend of mine has published an abuse memoir, and her publisher's legal team gave it a very careful read to see if any of it was actionable, and had her make some changes.
It's less a matter of people recognising themselves than them being able to make a legal case that they were recognisable to other people, and hence their names and reputation were brought into disrepute.
And there's not really that issue in TSP, as the ostensible bad guy, 'Cooper', is not identifiable -- and of course as sleuthing on here has suggested, he is in fact a fiction invented to cover up the fact that the Walkers lost their home when they couldn't repay a loan from a relative that they took out against their house to repay money Sally Walker stole from her employer.
The only thing that would have seemed obvious to me for PRH's legal team to do was, as part of their legal read, to ask for verifiable details of the real court case, to check that 'Cooper' wasn't identifiable. I suppose it's possible the Walkers did provide those, but that there would have been no way of knowing why two people with no connection to the Walkers were bent on evicting them from their house, or that the loan was to cover up a theft.