Seems highly unlikely that Reddit will back down at this point. But because they've chosen to burn their userbase, they need to accept the consequences.

Every sub that can stay private is a problem that Reddit has to deal with. They have to remove the mods and find new ones. Doing that is going to massively disrupt the community of that sub, and even people who were not really paying attention to this issue will start to get pissed at Reddit. They'll have to set fire to any good will they have left. But that's the choice they've made, and we have to make it as hard as possible for them.