I'm no fancy city town lawyer, but they are using Ian Fleming's James Bond character and using the faces of the actors from the movie without their permission, not to mention the rights to GoldenEye and 007 in general. But as long as the developers are not making a profit from the mod, it should be fine. Rightsholders get mad when you're making money off their dime, that's the whole thing with YouTube ever since they added profit sharing from views/subscriptions. There's also the further end of the spectrum where rightsholders feel nobody should be doing anything with their intellectual property on the basis that, for example, the GE:S devs did not purchase usage rights to 007 so the rightsholders feel they are losing money by having GE:S made for free. The whole thing is a bit of a grey area if I'm not mistaken.
Actually the characters' faces aren't the actors, they're done in a similar fashion yes, but when you compare the models to the film, they're actually a bit different (like Ourumov is an old man with grey hair but he doesn't look that close to Gottfried, Boris has messy black hair and glasses but he looks different from Alan Cumming when you put them face to face, and so on and so forth), they just look so much better than Reloaded because they're actually based off what was in the game and film, while making the faces more generic, which they can't get sued for that. Like I said it's really the names and the concept of the gameplay because they can't get sued for custom making the models from scratch, making models of real life guns that every FPS game now uses. Besides GE:S has been known about on the internet for years, with being one of the top Source mods in recent years, tons of videos made by popular YouTubers (like Seananners for example), making it very hard to believe that MGM, Nintendo, and Rare don't know about it's existence. Because of this, I think that if they wanted to take down the mod, they would've done it a while ago or in the last two or three years or so, and that they just don't care about this free mod, or possibly like it. I can actually imagine some of the original GE creators playing GE:S. lol
Maybe I've just watched the film enough times and played the original game enough times to spot the differences in GE:S models, I mean one look at Alec's model and I can tell you that he's not Sean Bean. xD