Here's why, emotionally, the case feel like extortion, even though legally it likely isn't extorition:
1 - In the typical settlement negotiation, the explicit claim is "Give me money or else I'll get more money from you in court," and the addendum "plus, your reputation will be detroyed" is obvious but left unstated.
2 - But here, the plaintiff's lawyer allegedly said, explicitly and as a negotiating tactic, in effect, "give me a lot of money or I'll destroy your reputation." Sleezy, but if there's a good faith claim involved, then likely legal.
Exactly
Generally these kinds of statements are considered 'trash talking' and not actionable nor admissable in court. Further attorneys are immune from suit from making them, even if the other side is unrepresented because their job is to advocate for the client.