Right, it's a case-by-case "loss" of the right to use the safe harbor as a defense against infringement claims. But copyright infringement claims have sizable statutory penalties per act of infringement (up to $150,000), so it's a very important for a content site to maintain that safe harbor. Perhaps more importantly--the safe harbor also prevents them from being dragged into court and spending a ton of money on legal fees defending themselves.
In this case, what is being alleged is that Popcorn Time is being used for infringing activities. If Github had not responded to the DMCA notice, it could be successfully argued in court (remember, it's a jury of laymen that make this decision) that Github knew that PT was primarily used for an infringing purpose and continued to host PT despite this knowledge. This could have exposed Github to a finding of willful infringement, which carries the aforementioned $150k penalty. (Github and PT would both be defendants in such a case, but as the deeper pockets Github would be the primary target and the one required to pay up in the event of a loss.)
In this case, what is being alleged is that Popcorn Time is being used for infringing activities. If Github had not responded to the DMCA notice, it could be successfully argued in court (remember, it's a jury of laymen that make this decision) that Github knew that PT was primarily used for an infringing purpose and continued to host PT despite this knowledge. This could have exposed Github to a finding of willful infringement, which carries the aforementioned $150k penalty. (Github and PT would both be defendants in such a case, but as the deeper pockets Github would be the primary target and the one required to pay up in the event of a loss.)