> Meaning that it found that Harvard’s procedures did violate Title VI
Declaratory judgments aren't findings of wrongdoing. They're simply words (hence "declaratory") that describe a relationship between the parties of a case. Cases that end in declaratory judgements are also always civil in nature, so I don't believe they can be used to penalize the party later as if they had conducted a criminal act.
> I don’t see any legal reason why an administration couldn’t hold Harvard’s discrimination against students—which happened, even if the Supreme Court changed its mind about whether it was permissible—against Harvard in allocating federal funding.
That would actually be an interesting case. I find it difficult to believe that the Court would allow such an ex post facto application. The problem with this is that anyone who engaged in behavior that was lawful at the time, then subsequently deemed unlawful, could be subject to abrogation of benefits or other penalties. That said, in light of how the Court's makeup has changed in the past 20 years, I suppose I shouldn't be surprised if I turn out to be wrong. I would be very sad, though, because it would mean that nobody can be assured that their current conduct, even if lawful at the time, won't be held against them in the future if the law changes later.
> Harvard’s defiant response to SFFA provides a reasonable basis for the administration to believe it has continued to engage in discrimination
I don't think it does. I think Harvard is saying "we will continue to lawfully promote diversity however we can." There's no unlawful action being contemplated, described, or advocated in its response. Costco and Disney, BTW, do the same.
> now that Harvard has decided to fight [Trump’s investigation of Harvard Law Review’s publication policy], the administration will have to prove its belief
You're mixing up two different plot lines. We're discussing NSF and other Federal grant withdrawal resulting from Harvard's failure to implement discretionary measures Trump wants them to take relating to hiring, policy, and curriculum. This other story is about investigating Harvard Law Review, which was announced weeks after the grant rug pull. It seems pretty obvious that Trump is trying to find any angle he can to prevail in his war against the institution.