Anyone suggesting a block doesn't actually want Wikipedia to pull out of the UK, it's a negotiating position to extort concessions.

Is it? If the law would prevent Wikipedia from operating in the UK without adding age verification, blocking the UK is just a method of compliance. Organizations like the EFF want to strike down laws like this, but Wikipedia exists to operate a freely editable encyclopedia.

It's really down to whether Wikipedia feels that compliance would go against the organization's principles. If so, blocking the UK is a perfectly reasonable thing to do. If another organization steps in to mirror Wikipedia in a way that complies with UK law, there's no downside for Wikipedia - they maintain their principles and the UK continues to have at least some access to free information.