Did they even have the option not to go nuclear?

Yes: hide only the games tagged “adult” (subset tag), instead of all games tagged “nsfw” (superset tag), to reduce the disruption. And then work swiftly to relist the adult games with content not being targeted by the payment mafia. Even if itch.io showed one or two false negatives, it would already be a clear sign of good will towards the mafia.

I’m glad the people working there did not do this though. I hope itch io lets the disruption stays on, for as long as possible; preferably affecting as many non-adult games as possible.