This isn't a big deal. This is small, interim funding. It's called staying alive until they make a decision.At least they are going to be able to keep the team together until a decision is made.
This is not unusual in business. I was once hired for a contract by an aerospace company for some very special work and was paid (at a very good rate) for six months to surf the Internet. Just so I wouldn't take a contract elsewhere. When the project was finally authorized I did my job and the team I worked with got it done on time and under budget. Not the norm in aerospace.
Cross Posted at Classical Values