It's not only Nestle who is making "Manchego" cheese in Mexico. Actually most brands in Mexico sells "Manchego" cheese, when you go to any supermarket you basically find four types of cheeses: the imitation Manchego, yellow cheese, and fresh cheeses such as Panela and Oaxaca.

It is an insult to original Manchego cheese as it is completely different in texture and flavor. I really think they should protect the Manchego name.

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Manchego is already protected by an appellation of origin. I'm by no means an expert but I presume that such appellations have to be pretty zealously protected legally to be useful, much like trademarks.

Here's a page about the regulating body:
http://www.quesomanchego.es/ingles/cregulador.htm

My bet (with no specific knowledge) is that Mexican manchego is a variant that's been around before Spain began defending the appellation. Perhaps Mexican Manchego got what's essentially a grandfathering or some such.

I don't even know where one would go to look for such things, but it's pretty common for foods that developed an independent existence in the new world to differ markedly from their old world precursors I often think of andouille in this regard (and try to avoid thinking of andouillette, which I refer to as "an alimentary canal packed into part of the alimentary canal"), though the tandem development of UK vs US "biscuit" is instructive too).

That's my guess and, as I said, I'm not sure where one would go to check it.

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Mexican Manchego is not a cheap imitation, but rather completely different cheese from Spanish Manchego, just like Mexican Chorizo (soft, loose, and raw) is much different from dry and cured Spanish Chorizo.

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