Right, so that's initially how I thought this would resolve itself: sedevacantists elect a pope for themselves and just have a separate religion and let the Vatican be (see "conclavism")
Except it doesn't seem to have happened like that and seems to be more in character in my view like the Western Schism, where there was confusion about who the pope was or if there was a pope for 40 years (except this time it's longer and there is added confusion with a false council and false teachings that appear to come straight from the "pope")
Hence I argue since a lot of people seem to think these teachings came "from the Church", there is "legitimate confusion" and more of something where the Vatican will have to be straightened out as reverting to previous norms in order for things to move forward.
It's possible it could resolve in this direction though of just separation (but, from "our" view, all the Catholic churches are practically possessed by a false movement; not unlike the East-West Schism though where half the churches went in a non-Catholic direction)
I'd just say that none of this has much to do with "Catholicism" in the sense that the overwhelming majority of people worldwide mean when they use the term. It's not jarring or problematic or controversial to believe in some adjacent but incompatible Catholic-like religion; at this point we're literally just discussing names.