I don't get this forced distinction between online and otb either: Niemann wasn't some innocent kid fooling around, he did it, when he was already a serious player, to further his career (I believe he stated he did it to get to play the elite online? I don't know if he was streaming at the time, but that would be another factor). And that's just what he admitted to.
I have no sympathy for him, cheating is the single biggest issue for chess, especially when you consider the push for online tournaments. It shouldn't be accepted or normalized, with "it was just online".
On the other hand Magnus is basically trying to block Niemann's entry to top tournaments, by making it a "him or me" situation, while neither giving an allegation or proof - that sets a very risky precedent. If Magnus doesn't want to speak, FIDE need to resolve this matter one way or the other.
The problem is that they didn't act on online cheating in the first place. They may need to cooperate with the platforms and have them report cases of cheating where the player's identity is known, so it can be dealt with when it happens and doesn't turn up out of the blue years later.