You are right, but this isn't a video game versus a grocery store chain comparison here. It's a real life band vs a movie of a fictional band. The question of trademark infringement is not necessarily even about direct competition or intentional use. It is about whether a reasonable consumer of their product might confuse the two names/logos.

Were the movie just about some typical warriors fighting demons and otherwise just sharing a similar name, I doubt that they would have much of a case due to lack of overlap. But as the film is about a band (even if the band itself has a different name), and the actual soundtrack for this fictional band is immensely popular and carries the film name, and they're selling live shows with the artists who created the actual music under the same name. I think they could make a really good case about consumer confusion.

Edit: They even demonstrate actual consumer confusion that has already occurred in their court filing.

To prove their point, included in the filing is an email from a person who spent $500 on top-tier tickets to a Demon Hunter concert in Albany, thinking they were purchasing admission to a KPop Demon Hunters event for their children, aged five and six.