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.
Of course they are just waving it. It is too powerful a tool for future issues to give away. But obviously it is morally completely disgusting and corrupt.
When this happens again the outrage will be less, and they will be more willing to dunk on these people. Can you imagine your close family or friends killed and a ToS blocking justice for the killers?
Most people won't have heard of this. But even if they did, it's Disney. They own so much media that even if you did avoid everything Disney-branded, you might still find yourself watching something from Marvel movies, National Geographic Partners, Pixar, Lucasfilm, FX, ABC news, ESPN, Hulu... I can go on: https://en.wikipedia.org/wiki/List_of_assets_owned_by_the_Walt_Disney_Company