On the contrary, it isn't being sold, it's being given away and MAME's legal information doesn't define a redistribution — the app store download could easily be argued to be part of a redistribution, not a complete redistribution in itself. So they'd be fine if the source is offered by other means. Indeed, if the iOS code has been contributed to the main branch of the project then the app store release isn't even a redistribution.
Re: the trade mark, there's no reason to suppose MAME haven't given approval and whoever uploaded it will have provided assurances to Apple to the effect that they have approval at the point of upload.
If the MAME team haven't granted approval and say so to Apple then it will be taken down. But they won't have been wrong to allow it through in the first place — it's not Apple's place to do legal background checks on all products and in any case MAME's own terms don't make it clear that this release isn't permissible.