The fact remains, a "bad deal" (which won't be a bad deal, despite the fact the Brexiteers will try to blame all of the UK's problems over the next 20 years on the EU) is better than a no deal scenario.
"No deal" in terms of brexit literally means things like:
- No air travel between the EU and the UK.
- No security agreements or co-operation.
- Visas required for UK visitors to some EU countries (basically we'd be treated as if we are say Brazil when it comes to travel).
- Strict customs checks on all trade between the EU and the UK (exports and imports) - causing supply problems and pushing up prices.
- Etc etc
No, nobody really wants the above surely? But that is what "no deal" means. Hardly just "some initial pain". More like total and utter chaos.
And the EU is hardly making "threats". The above isn't a list of punishments or things the EU will impose on us because we have annoyed them. They are simply direct consequences of a no deal situation (because the above things require deals to maintain).