They couldn't have known that though. If they'd kept the cars behind they likely would have restarted the lap before, as Latifi's car and the debris had been cleared. Who knows what would have happened if there were two laps to go and Verstappen was on scuffed softs and Hamilton on worn hards. We can only hypothesise. Even if they had only raced one lap with the lapped cars still between them, it's still hypothetical.Has the rules been followed, Mercedes' decision would have been the correct one.
Mercedes lost it because they had a window and instead chose hope or defence of a wounded soldier. It doesn't make it fair or deserved on Hamilton's part - he should have won the title, and I'd hope he would after Saudi Arabia.