Am I misunderstanding this entire ordeal, or are Anthropic's policies not precisely what the DOD agreed to in its initial contract with Anthropic? Did the DOD not then seek to change the contract terms, to which Anthropic refused?

If I sell the DOD a service with contracted terms X/Y/Z, the DOD agrees, then later asks me to drop Z, and I refuse, how would that warrant the legal definition of a supply chain risk? How is the appropriate response for the DOD not to simply find another service provider?

You've misinterpreted the situation so severely.

The DoW tried to change a contract they had signed. Anthropic refused. That doesn't make them a supply chain risk (the wording of which implies "likely to sabotage" the government).