That is most definitely exactly exactly how it works.
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ITT: People who think this won’t happen because they don’t understand the first thing about IANA, ICANN, their policies, ccTLDs, or the history of this kind of thing happening before. While ICANN has the authority to allow the .io domain to continue to exist, it would be a complete reversal on their newly established policy for retiring ccTLDs, which was primarily motivated by being burned on this exact type of thing happening before.
A good example is the .yu ccTLD which after a long back and forth was finally retired in 2010.