Because simple similarity doesn’t usually result in a lawsuit? Especially if one of the words isn’t a public product name and also happens to be an existing word with no existing specific use in the industry.

I'm guessing that they were safe in that it was more or less a 'codename' for a specific product's CPU that nobody else could buy, versus a product out on the market, left enough clear separation to avoid Trademark complaints.

The combined might of IBM and Microsoft's legal teams, even (possibly even moreso?) then, was better than Intel's to be sure.