Having thought more about this - I'm fairly certain the H&M could have managed to get exactly what they wanted.
If M was offered the chance to carry on with acting - but receive no title - then she could have reverted to this.
Give up the Sussex title, but Harry remain a working royal.
He would continue to receive the sovereign grant, but she wouldn't.
Plan to have a base in the Uk and in LA. Given the Commonwealth role (which H could keep), LA would be an ideal place to do short tours of the Caribbean, Canada and the USA.
They could fly back to the UK for a couple of months at a time while Archie is not at school, and he could do royal stuff, including further tours abroad to Africa etc.
She can carry on acting (and isn't silenced like a working royal) while benefiting from Harry's title and position.
W&K didn't do too many royal engagements during the early part of their marriage, so H could conceivably get away with setting up mini tours of the Uk for a week or two while he's here.
I feel like they've missed a major trick here. Their eco warrior status goes up in smoke of course, but it would be the easiest way to keep the funding and status - she's still a Princess after all.
The crowds at the wedding were for a Harry rather than her, given she wasn't that well known (same for Kate).
But their tantrums and desire to have it all may mean they lose everything