The reputational damage that team of lawyers did to the company massively outweighs the cost of a settlement. I personally will never do business with a company who thinks the EULA or TOS of one service indemnifies them from egregious negligence in a completely different line of business. This was simply beyond the pale.
Edit to note: Despite the title, they aren’t actually reversing course, they still claim they have the right to force arbitration, they are just choosing to waive it in this instance. If you do business with Disney, you are a fool.