Ok - let's look at things logically.
The funding package will be for the duration of the package. I mean, wacky as Cornwall Council might be, they aren't able to award a contract for 8 years without funding. Now it depends on how the contract and revenue risk sits. I would suspect that it sits with the Council not PCB - after all, there are a load of new services that have no pre-existing passenger data so you can't expect an operator to guess what they may take. Therefore, assuming that PCB have done their sums (and they were more expensive than First, remember) then they probably won't have any pressure to walk away. If a break clause is exercised at the half way point, I would find it difficult to believe that they haven't protected themselves, legally and commercially. Remember that PCB will have had to go to the Go Ahead board and get this proposal with the expenditure and contract signed off, as indeed First will have done.
That's my honest, non partisan view.
Now, do I think the TfC package is sensible and balanced? Of course not, and it feels like there will be a frittering away of money on lots of modern vehicles carrying fresh air, and that's before Covid. Feels like a load of rather arbitrary decisions made on where to run buses such as Lostwithiel to St Austell (tried before), or Tregony to St Austell, before my personal fave of the Launceston to Bodmin service serving one village and three cottages. I've seen too many instances of councils getting a slug of cash and simply splurging it on all sorts of personal hobby horses or, seemingly, looking a map, seeing a gap and thinking a bus should go there without ascertaining the actual need.
FWIW, I feel it would have made more sense to emulate the type of Kickstart schemes in the mid 2000s where funding was made available for particular routes that the operators proposed. They would need to show a plan to develop the route and would also have needed to put some "skin in the game" - IIRC, Culm Valley Connect in Devon was an example. Get the operator on board and invest so they have a vested interest in success. The council can support in terms of funding and infrastructure.