I don't believe that Roddenberry canceled FASA's contract for a second, but I'm wondering if there's any truth to the idea that they were working on a ground combat system. Has anyone ever heard of this?
FASA managed to anger the Star Trek Office (Gene Roddenberry and his representative, Richard Arnold), which was responsible for vetting all tie-in manuscripts (in addition to them being vetted by Viacom Consumer Products).
According to Richard at the time, FASA took numerous liberties with TNG factoids when creating the TNG "Officer's Manual" (1988), and changes that were requested to the submitted draft were ignored in the final manuscript. For example, the illustrators decided that Data had no toes, despite Lore's limbs having been shown in "Datalore". But yes, GR was disturbed by the RPG's emphasis on combat over exploration.
So when the "Season One Source Book" (1989) came out, it had not been submitted by the same route (only via Viacom) - and it had many errors and assumptions, such as Betazoids coming from the planet Haven (a complete misinterpretation of the episode "Haven"). As a result of GR's misgivings (about this choice by FASA to avoid him) , and aspects of the Pocket novels and DC's comics that had annoyed GR,
all tie-in contracts were renegotiated - and a memo was released to those who won back their license explaining what could be done in future. FASA's license
was not renewed.
So yes, GR stopped their contract. (Or they were urged not to renew.)