I mean they got threatened with the Defense Production Act. Firmly standing their ground without an inch of give may backfire spectacularly too, if the DoD injects itself into model training.

I think they pretty clearly demonstrated good faith and where it ends up is a tactical choice I'm not in a great position to judge.

If DoD seizes the IP, the issue is they will need the cooperation of their scientists at least in the short term, if they want it to remain a fronter model. The labor angle isn't entirely guaranteed though the white collar worker has very little spine in this country.