If so, then secular law trumps (and negates) canon law. If not, then why give the appearance of succumbing to man's ruling when you have no intention of obeying?
The Church should take the unequivocal stand and say "Under no circumstances whatsoever will our ministers break the Seal of Confession, the results of this appeal notwithstanding." And Catholics should stand ready to defend their Church if it comes to that.
The reason it's being taken this far is because there is a chance the SC may rule in their favor. If so, then it's a gained protection for the Church against any such future acts. So it's worth the effort even if they loose.
If they loose nothing will change. The priest still won't say anything for the rest if his life in or outside of jail. If he cares for his soul that is.