I mean given all I hear it would not entirely surprise me that they would hold the baby hostage, at best

As artists that go on tour, the US leg likely provides a significant chunk of their income. If they were just on vacation, that's a different story.

Worth figuring out for them, as it boiled down to an administrative issue with unclear wording in the insurance contract.

Exactly. You're already outside of the country. Let them send you bills. They aren't going to send the FBI to kick in your door because of unpaid bills...

Convict you in absentia then use the judgement as an excuse to freeze your bank account and ban you from all forms of banking (something that the US has the power to impose on foreigner because they hold every western bank by the balls due to their reliance on the fed)?

I don't know if they would do it, but it certainly wouldn't be unconstitutional; the US have long made it clear that foreigners on foreign land don't have any legal rights whatsoever. I would be having a long conversation with lawyers to get some hard assurances before going down that path.

Repossess the child.

Extradition and imprisonment.