What CHAZ shows us is that there is perhaps a middle ground between "asking" and "taking up arms," but if none of the demands are met, I don't know that there are many other steps left.
In fact it looks like in some places the cries to defund the police are finally being heard and actioned. I hope there are more, as this is a radical act and not just a legislative tweak. It's clear that a fundamental rebalancing of the relationship between police and society is needed, starting with talking away their weapons, and total de-escalation of police violence and their effective immunity to the consequences of their racist actions.
I hope "CHAZ" isn't a last step before open, armed conflict, because if it does go that way the public mood is going to shift in a millisecond to enforcement. Just like I hope here in the UK we don't see people pull down statues of Churchill - he was a racist asshole, but he was also the leader that brought us through WWII, and the population of this country aren't ready to stop venerating the latter because of the former yet.
I'm also not sure what "winning" looks like for either side when that starts.