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It certainly doesn't sound actionable, but if it is grounds for lawsuit because the faculty was overruled then I would be very supportive.
Whether the board have overruled faculty before or not doesn't change the code of conduct which existed even before the protests, or the institution's ability to make decisions on ending business with students over their actions on the institution property. The fact that the school haven't acted against students in previous protests says nothing of their authority to do so.
Found it, it's called Promissory Estoppel. Basically the University has not done this before and that creates a reasonable expectation, both because of a lack of precedent and because the majority of their marketing is that people who do the work and pay the money will get a degree.
That term refers to a defense of breaking a contract's terms, so I suppose you could use it to describe students breaking the code of conduct with the expectations that it wouldn't be enforceable as long as the students can demonstrate resulting financial harm in court.
No. Just no.