This isn't about their pandemic actions, this is about the controlled digital lending they did for like a decade before COVID.
If it were just over the emergency library, the court would end the restrictionless lending and likely issue a fine. Instead, the court ruling was that CDL was illegal, and only mentioned the National Emergency Library to say "as CDL was already illegal, it was also illegal." There also would likely be a fine, but the case is being appealed.
IMO it's telling that publishers ignored the controlled limited lending that as you mentioned had been going on for a decade before COVID, and didn't file a lawsuit until IA started doing unrestricted lending.
My impression is that publishers were willing to look the other way when IA was distributing a small # of rare/out of print books, but once IA's homepage became unlimited copies of Harry Potter they felt like a line had been crossed.
They had been building up to a court case over that decade, including a 2019 open letter from most of the major players of the lawsuit. And if their problems were just with the NEL, they would have dropped things after the IA shut down the NEL.
The NEL was a PR boon for publishers, allowing the narrative to be "the IA deserved it for the few weeks they allowed a couple hundred copies of The Lion, The Witch, and The Wardrobe be unfairly borrowed." But it's irrelevant to the actual lawsuit.
Even if it presented an opportunity for them to pull the trigger, the publishers had their eyes on the lawsuit for years. The NEL may have been a mistake, but it's not relevant to the actual lawsuit.
If it were just over the emergency library, the court would end the restrictionless lending and likely issue a fine. Instead, the court ruling was that CDL was illegal, and only mentioned the National Emergency Library to say "as CDL was already illegal, it was also illegal." There also would likely be a fine, but the case is being appealed.