First, I do not believe for a second BJ Penn plans on retiring. "Grease" has been too much of a hit for him to walk away at this point. Right now the UFC is freaking out because one of their biggest stars is getting hit with allegations from all directions. They need this story to die as quickly as possible. The only question is how much is it worth to them?
On the other side, you have BJ Penn. He's sitting in the perfect bargaining situation. He could very easily kill the story by saying, "The Vaseline was such a small amount, it had nothing to do with my loss." Instead, he's been largely silent, as his lawyers debate the best way to file the complaint with the Nevada State Athletic Commission. I do not think he is choosing to let the story simmer because of anything to do with his legacy. This comes down to dollars, as always. Penn is too smart to let an opportunity like this pass him by. He has the UFC in a corner and can hold them for ransom. His retirement talk is all part of the plan.
Don't be surprised if Penn suddenly emerges with a contract extension and a renewed spirit to fight.