I think a lot of people here are underestimating how likely it is MS can recoup (and surpass) revenue from XBL. Free multiplayer will likely increase engagement in games that are already F2P, making them money. Combine that with their own multiplayer titles going F2P, and they're going to snipe people from other consoles. If they nail the pricing, and throw in a month or three of Game Pass, that'll be an incredibly tempting offer.
$500 might get you a Series X, exclusive free multiplayer titles (and the multiplats) that don't require a fee to jump in to, and a short time to sample Game Pass. Compare that to $500 up front, plus a $60 game or two, and then a $60 sub just to hop online...and you're at $700+ at launch. That's before taking into account that old accessories will work on Xbox, but you'll be dropping cash on Sony's "we believe in generations" approach (unless Sony announced that previous accessories will work and I missed it).
No matter how you slice it, the value shifts over to Xbox for people that mostly play multiplayer...if this actually goes through, of course.
I really don't think Sony will be pressured into doing anything. They're far and away the market leader and console users have been indoctrinated to accept paying for online. Even if MS drops the requirement I don't think there'll be that much of an outcry if Sony keeps an online paywall.
If this happens, there absolutely will be pressure to drop the online sub fee. Sony titles are mostly single player, one-and-done games. People that buy PlayStation, but don't really play their exclusives, will most likely switch to Xbox. Anybody that has every major platform will likely make Xbox their main while PlayStation gets relegated to exclusives duty. They'd still get their COD/Madden/NBA fix while also getting to jump straight into Halo, Forza, etc. The number of people that are loyal to either brand is not nearly as high as people here think. Even if they keep the PS+ fee, Sony absolutely will have to increase the value of that because multiplayer and a couple of free games will not cut it.