Many people are surprised Microsoft is "allowing" this.

Actually it's nothing more than the Game Content Usage Rules in action. When these were developed, people all thought they were focused on machinima. The truth is that while they do address machinima they also allow for a lot of other things. Mods like this are one of them. The developers aren't selling the mod, they're not monetizing Microsoft's IP, they're just creating something to share their love of the Master Chief on a new platform. It's a great thing for us and a great thing for the gaming community. And much though I love my friends at Epic, Unreal Tournament isn't Halo. This will also remind people of just how great the Halo games are and remind them that if they're done with the user-created faux-Halo experience, the real Halo is available only on the Xbox 360. And no one is taking characters from PlayStation games (do they even have any games?) and putting them on our platform...