I think this is the better option in the end. There could be an 80-90% drop with some hodlers thinking the Patoshi coins moving is a deal breaker. The market would eventually recover as you said, the supply never changed.

Rolling back the chain would cause a fork IMO. It would also be a deal breaker for some and it would imply that Bitcoin was not as decentralized as everyone thought. The market might not recover from a roll back.