Another Etsy Seller Asked Me To Take Down My Listing And Accused Me Of Copying Her... What Are My Options? Location: California, Usa

My location: California, USA
Her location: UK
This is for Etsy.com

So this seller and I sell very similar items on Etsy, but mine is distinct from hers.

The product:
We both sell floss drops, which are little embroidery thread holders you can use to organize your thread while cross-stitching. Hers feature a simple slit where you slide in your DMC (thread) label, and mine feature either a spot where you can write the thread name/number, or you can slide in the label without having to cut it in half. I also have a spot where you can cross-stitch your thread onto the floss drop so you can see the exact color that should be on that drop when you run out of thread. I also do a lot of work to hand-finish mine, such that the edges are all soft and curved (not just the corners). I believe hers probably come fresh off the laser based on her photos featuring shiny edges on her thread drops.

However, I can't find any specific information on *what* exactly is under IP protection. I'm happy to change my design if I'm actually infringing on her IP, but I feel like.. I'm not. Maybe I'm biased?

I can totally see where she's coming from, but I genuinely came up with my design on my own and combined all of the features I would personally want in a thread drop into my design. Do I have a leg to stand on here? What are my options here? If she reports me, will I be able to fight it at all? It isn't like I copied her listing. My product is functionally different, despite being similar.

If it's the heart in the bottom corner that's a problem, I'm happy to change it, but do I need to?

Edit: Removed the links because she found my post and accused me of doxxing her address.. which I also didn't do.