The logic is simple. An icon is a representation of something. An Image, on the other hand, is an attempt to capture the totality of the same thing.

Therefore I ask you, my fellow Titans; would you like to be known for your icon, or would you be known for the image you wish to project?

A word cannot be granted enforceable copyright status if it is a generic word. This is why Hasbro has to resort to names like 'Autobot Jazz' and 'Deception Ravage' to get enforceable control over the character that they could not get by using the simpler but entirely generic words of Jazz and Ravage.

The developers cannot use Icon for the legal costume outlets in game because, while Icon is a common and generic word by itself, there would be complications involved due to associations with the predecessing game's use of the word in context. Using Image as a name for a similar outlet in this game is perfectly reasonable and legal as long as measures are taken to ensure that it would be impossible to associate with the comic company. The simplest measure would be font selection to avoid similarities with the comic company's logo.

Of course, the best way to avoid associating Image Comics versus Image Costumes is making sure the character creation process produces properly proportioned people instead of stick figures with beach balls and spines that bend to angles of 90 degrees or more. In other words, avoid Liefeldian designs like the cancer they are.

Another way to avoid the issue that I just thought of: Acronym.

I.M.A.G.E : Improving Metahuman Aesthetics and Generating Equipment.

This would render any comparisons to the comic company null and void, and refer back to CoH on a new level by making I.M.A.G.E. into a government department like ELITE and MAGI from CoH. There's plenty of room for meta-level references that won't detract from the quality of the finished product.