Accept the 5% drop the action enter into separate negotiations with the TOCs and if they don't go well then enter into a new TOC level dispute.... Or am I missing something?
You are missing that the latest statement from the RDG today says that the RMT cannot have any further industrial action about anything else related to this dispute, including at TOC Level once Stage 2 Negotiations are started.
Don't forget the offer was that Stage 1 Pay Increase would be paid when the offer was accepted, and at that point Stage 2 Negotiations would begin at a local level in respect of the changes to ts and cs. But they are now saying that you cannot have any industrial action in respect of Stage 2. But you don't know what the local level negotiations are going to involve yet. So basically they are now saying you have to accept whatever is proposed at Stage 2, even if it is terrible, as you cannot hold any further industrial action about it, even though you don't know what you are agreeing to yet.
So basically "You can't hold any action of any sort about something we haven't given you details about yet".
That isn't what's been reported though, what's been reported is that action related to the pay dispute has to stop, which as the pay dispute would have been resolved that's reasonable. T&Cs are/should be a seperate dispute.
Quite why RDG felt the need to state that resolving the dispute needs to end action I don't know as it's stating the obvious and only provokes things, but the RMT don't need to throw a tantrum over it either.
But the pay dispute won't be fully resolved. Stage 1 / Year 1 would be resolved, but Stage 2 changes to Ts and Cs would not yet be resolved as there is no information yet on how that will affect each TOC.
If the dispute was fully resolved, then yes, there should be no more action. And nationally the Stage 1 offer would have been accepted. But locally at each TOC the specifics of the Ts and cs changes won't have been resolved yet as they haven't even been discussed yet.