I don't think Google should unresign her. I think it should admit it fired her (technically speaking), and pay her a bunch of money (to make up for the bad handling of the firing).
I agree, she should have been fired earlier. However, she was just promoted, which meant she must have had several quarters of excellent perf.
I think one thing that would be truly excellent, but won't happen, would be to have Megan Kacholia defend herself by explaining her actions to the wider Google community. In particular:
Why was Megan, a person with effectively no research experience, a VP in Google Research and making decisions about research papers being withdrawn? Her lack of experience in the area seems to have led to an exacerbation of tensions.
Why did Megan convert an offer to have a discussion about a resignation into an interpretation that Timnit resigned voluntarily, coupled with an accelerated departure (immediate, with termination of all Google services)?
Why was Megan pushing so hard to have the paper withdrawn, given that the paper wouldn't be that impactful on Google's reputation, made some useful (if obvious and a bit overstated) points, and wasn't being published in a prominent venue?
To Jeff and Megan: to what extent did Jeff support Megan's decision to fire Timnit over a refusal to withdraw a paper, or did his support come after learning Megan had fired Timnit? To what extent did Timnit's previous tweets calling out her employees and mentioning confidential Google Research activities play a role in her firing? Was her discouraging email really a reasonable justification for accelerating her termination?
My guess about all of this is that Megan and Jeff decided to fire timnit when timnit posted several negative tweets attacking Jeff and google Research, and used the paper and the email (and vague offer to resign) to justify the firing and they didn't think through the implications of firing a twitterati like Timnit in a roughshod manner. This seems most consistent with all the evidence I've seen.