I don't think she has already spent the entire 54k, but it is planned for already.
Bad news = tears = more fundraising.
I expect that they asked for a 25k$ retainer, that would be about half the raised money.
Then they ran that money out trying to get a settlement arranged, but since Fatty Booboo is to high to understand basic law, she still believes she "did nuffing wrong".
So the offer to Ethan was more an insult than an actual settlement offer that takes into account the realities around the case and the harm she did with her organized copyright infringement, in collaboration with Reddit Jannies and other streamers. I am pretty sure the stream and video of the stream saw enough viewers to get her over the offered settlement money in youtube adsharing revenue and live ads played on Twitch (if she uses them).
The lawyers will have told her a rough estimate for the lawsuit cost if this goes to trial and asked for additional funds since the attempts to settle this in line with Fatty Booboos expectations failed.
Considering this case I think her own cost will likely exceed 350k$ easy, if she wants to have an actual chance in court by finding expert witnesses who can testify to counter whoever Ethan might put on the stand.
I would expect at least 3 experts to be called.
1. Youtube expert, to explain how the platform works and monetization.
2. Twitch expert (same as above)
3. Video/Content creation expert who explains how much work is put into creating a multi hour video and how re-streaming by others undermined the market, dealing significant harm.
(Semi-Experts 4. Ethan/Hila (and Kacey would have to find someone who can "debunk" what they will testify))
Three of those could be covered by one guy, but why would Ethan limit himself if he can afford calling the most Gucci of Experts, forcing Kaceytron to find a way to counter them, driving up her trial cost into infinity. He might as well call 10 experts.
The fundraising money Kacey got has been long accounted for, even if it has not yet been spent, and we are in the cheap part of the lawsuit.
Kacey's own lawyer fees going into excess of 350k does not take into account the actual judgement and taking over Ethan's costs. Since he registered the copyright, Kacey will not just be stuck with her own lawyer fees and the judgement. Every minute she fights this, she is also spending money on Ethan's lawyer, because she is 100% going to lose, and she will 100% be forced to cover his costs.
The longer she fights, the worse it gets for her.
The house is already gone.