I’m sure Musk will get paid regardless. The losers will be US taxpayers and some insurance company.
US govt self insures it’s satellites, so it’s a taxpayer loss. This is what happens when you go lowest bidder. Musk has milked a lot of taxpayer money and has a track record that is awful compared to US staples like the Delta or Atlas. Sure, the falcon is cheaper but it fails more so it’s all even in the end.
If Musk’s booster performed its portion of the mission profile then how can the US Gov’t refuse to pay his company? According to the report, the upper stage failed. Is the upper stage a SpaceX product of is it part of the payload? It would make a difference.