1 - So how do we deal with this? Force them to produce something against their will?1. The Hollywood blacklist was also carried out by private studios. We generally consider that to have been pretty bad.
2. I think the main concern is that studios 'weighing pros and cons' is actually a very shallow and surface-level process. Studios (and other businesses) can and have been bullied or tricked into taking action over any nonsense that anyone can gin up, as long as it's loud enough. James Gunn was famously fired over some dumb jokes only for the studio to hire him again a year later once it was obvious nobody had ever actually cared.
2 - I'm sure many decisions are nothing more than knee jerk reactions, but as you pointed, these tend to self correct once the dust settles, unless the "canceled" person actually did something wrong.