It violates Apple's policies on a technicality - Pebble are happy for this app developer to use their trademark. If the developer escalated the issue, I'm sure Apple would accept their evidence. I speak as a developer who's been through this process before.
That's an utterly idiotic reason for the app to be rejected. Some of the first-tier Apple reviewers really don't engage their brains when reviewing apps.
My advice to the app developer would be to escalate the bogus rejection. Apple do listen if you state clearly why the app shouldn't have been rejected.