I'm doubting the tenant's lawyer advised them to file a counter-suit with an expectation of gaining anything from it. More of a scare tactic and it seems to have worked in this case. I would bet anything the tenant's drop the lawsuit the second the landlord does and just lets their agreement ride. They have to know they can't get back money already paid and a settlement offer they brought to the table in writing. Everything else about these tenants seems like they know what they're doing, it doesn't make sense they would file a ridiculous lawsuit without it being a ploy.
That being said, I wouldn't test it. Move on, write your lease better next go around, and learn from this.