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> Has the Linux Foundation abandoned all principles?

All? No, but certainly some.

> Should they have fought the US government?

Yes

In some sense, they did. The spirit of free software is inherently pro-freedom and against any external actors being able to pressure your entity into submission. This includes any and all legal threats or orders. Look at the history of PGP for an instance of fighting the US government to defend a greater principle.

In practice you can't fight everyone all at once. On the net it may be better to compromise on some to defend others you cherish more.

Because of mutual incompatibility of said laws and the inappropriate exercise of alleged sovereignty.

US laws is not “other countries” laws. Linus lives in US.

… and Finland is on the same side as US anyway, might have similar views.

Btw. Did Linux ban all Russian speaking people or Russian citizen or people with Russian IP addresses?

The intent was to remove people of any nationality who work for Russian companies from being kernel maintainers. The way they rolled that out didn't match their intent, though.