I have a mixed view of unions. I think they're best used to protect the individual, but if abused this is a mixed bag as well. Workers are a diverse, clunky mess of individuals good and bad, and so are the protective mechanisms.
However, I think that companies should be able to shutter departments, entities, and roles pretty much at will provided they compensate those affected within reason. Obviously this gets complicated if a company seems like they're closing a section specifically because they are unionized, or choose to become so.
But here? I think if they're negotiating for additional compensation for a period of time they should be negotiating within, that's reasonable. But if they're trying to block the closure, that's questionable.
All of the traditional game house structures are under stress. The traditional model has evolved into an astronomically expensive mess. It needs a complete reset, and that never goes easily for those participating in the current state.
My guess is Microsoft will cut them a check and move on. That's probably best for everybody.