You have obviously lived through some similar experiences as I.
I recall unexpectedly losing my immediate contract manager and another contractor on the team about 9 months before the deadline - they were poached by EDS for a crash Y2K project in S Korea by the traditional method of "being made a financial offer they couldn't refuse", so certainly some large and very well funded Y2K projects were happening in Asia. Their key skills for the gig were a very specific set of niche AS/400 assembler and COBOL skills. We were at the tidying up stage in my project anyway so no hardship - by that time my major Y2K projects for a different client (in Tandem TAL, C, and 8x86 assembler) were already well in the past.
I recall hearing on their return about about a significant amount in US cash per contractor being set aside if the worst happened and there was civil disorder, so someone was taking it seriously - as you say, there was significant collective fear, and at least some of it was shown by the experienced grey beards, not the inexperienced young whipper snappers. I myself didn't go full survivalist but I certainly made sure I'd done a thorough shop before New Year.
I know for a fact that the code I was asked to work on would have failed completely without remediation, locking out all client-sever software (it was cryptographic security middleware) and the resulting problems would have been quite significant.
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