Not sure everybody will like this answer. Since tensions have increased, I just took the blame and said that how I handled this engagement was not professional (communication and management) and for me to just take "hit" and not get paid.

I took this option so that relationships are not severed and just a learning moment for myself.

Honestly I'm now at my lowest point now since I never had negative feedback on my work even at times where I winged it. To give some context, I also have a side project that a 100k daily users, and some open source contributions to add to that. So technically I can assure that my technical skills are on point. Just unfortunate that this happened.