I know this may just be my conspiracy-theory spider sense tingling, but....
Stonewall (who seem generally smarter than Mermaids) may have teed this one up with the LGB alliance action, then jumped off sharpish leaving Mermaids to take the fall-out ... on purpose.
The Nolan podcast burned them. They knew if they were to survive they would need a high profile sacrificial lamb.
When the dust settles they can reverse strategy, priorities, whatever. But I reckon all this has been manipulated by them as a damage limitation exercise.