I could write a dissertation on this subject.
But, short answer, the Oilers colors and jerseys belong to the Titans and always should.
I agree with you on the first part. As for the second, I can see why the Titans would want to keep them, but I could also see a scenario where they negotiate some type of settlement.
Going on memory, I recall Bud Adams saying that he wanted the Houston Oilers name permanently retired when he moved the team and that Paul Tagliabue agreed. I also don’t recall any efforts from Houston to keep the team name, colors, history, etc. And, this all happened after Art Modell had moved his franchise to Baltimore and had settled with Cleveland, so it was not as if this precedent did not exist.
The article talked about the at (btw, thanks it is a well written and well researched article), the city had the chance, but apparently didn’t feel the need.
Just a side comment, but in the late 1970s and early 1980s, the Oilers were my second favorite team based on the saying about the enemy of my enemy being my friend. I hated the Pittsburgh Steelers big-time and wanted to see them lose, and the Oilers were their biggest rivals. That carried over through 1993, but I then lost interest in the team.
Those uniforms were classics, and it is a shame they were retired.
To be fair, I did like when the University of Houston copied them.