They didn't comply, which is perfectly reasonable. But they should have stopped at that. I don't know what "fixing" you're talking about.
The effort to make that change was significantly less than the continual effort required to deal with the pressures. From a cost perspective their decision makes sense, from a customer perspective less so.
I don't know the exact ins and outs of how courts will enforce foreign judgements (I'm sure it's very case-by-case), but saying "we cut off signups from people in that country" is surely a very strong prophylactic against such a judgement being enforced.
And on a more petty level, Russia could make serious trouble for any Russian expats employed by Fastmail (or their relatives still living in Russia). Cutting off signups makes this at least marginally less likely.