Comment by gnfargbl

The more I think about it, the more I agree that this is the likely outcome.

IO has been in the ISO standard forever, so there's plenty of historical precedent (like UK). Furthermore, it continues to be descriptive of a specific part of the world (like SU). The easy move here is for the ISO committee to mark IO as exceptionally reserved, for ICANN to declare that this of course makes it a special historical case which sets no precedent, and for everything to continue mostly as usual.

This assumes, of course, that ICANN aren't looking to make some kind of example/statement about misuse of ccTLDs. If they are, things may be different.