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How much of this was just saving face, since the letter threatened canonical penalties that did not occur, and are now obviously themselves suspended by Rome agreeing to back down and let everyone work it out on their own?

This very much feels like an attempt to retroactively smooth things over, while still in a way meant to save face for the bishop and the new major archbishop.

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100%. The bluff was called.

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Ed Condon’s analysis of the importance of the Syro-Malabar situation is spot-on. If this whole liturgical crisis has been brought to a head by Rome’s ecclesiastical meddling (in which they’ve ignored the Canon Law of a sui iuris church), then no one is safe. Ironically, the same scenario could replay itself in a Roman setting, while trying to obliterate a liturgy (the TLM) which completely faces ad orientem. But then, when in history have ecclesiastical puppeteers ever been consistent?

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