I just think that using the "wrong" title to identify him in a legal document was a mistake. I think the US Judiciary has gotten increasingly politicised over the past few years & if you get a Judge that wants to throw what Disney did out this gives them an option in a way that could have been easily avoided.
You are getting way too caught up on the fact that "King of England" isn't his official title when it does not matter in the American legal system. Can Prince Charles through majority public opinion be considered the "King of England" beyond a reasonable doubt? Then yes, it can be a reliable argument in court. It's not the "gotcha!" you think it is over here.
If someone was attempting to say, legally do something to "Kamala Harris, Leader of the Senate." the law wouldn't get hung up on the fact her official title is Vice President while the job itself is "President of the Senate" because all those things are technically true. Charles, for all intents, is "The King of England" even if only in ceremony, just like he is technically the "King of Scotland".
The only way, legally, Disney would be in trouble is if they titled him something that no one within a reasonable doubt can consider a title they hold, like "King Charles, King of Sunny and Funland." No judge would throw out a case just because you shortened the long winded official titling down to "King of England", a title pretty much everyone here in the US call him anyways.