Even given your ifs, it is absolutely not in IH's favour, which is why no other VC would touch it. Rossi has obligations to hand over IP with no continuing incentive to do so, nor incentive to continue developing the product. With, as here, a revolutionary but unproven product where there is no set of skilled practitioners who even understand the theory - let alone practice - to lose the inventor who presumably has all the expertise needed to get stuff working and develop it further is not just careless, it is catastrophic.
You might think it was in IH's favour if you had a simple view that "Rossi LENR is simple, anyone can do it, and modify it for different uses, when given the magic formula". Do you think that likley? More to the point, do you think any VC including IH would believe that?
Nor is there risk to Rossi. He has the license for Europe, half the world. If the device works the fact that he therefore becomes (as somone said here) a single trillionaire instead of a multi-trillionaie surely is no risk?