No legislature is bound by the actions of a previous legislature. That’s why elections are held - to change the course of a legislative body. And should a leftist judge insist the contracts by honored, the legislature can impeach and remove him.
But we will never see a legislature in CA that would nullify and rewrite these union contracts, so you’re 100% correct - “The best possible outcome for California at this point is bankruptcy.”
States cannot go bankrupt. What they promised to pay, they actually have to pay.
Even if everyone in the state goes bankrupt.
Think about it.