EC 261/2004 will assure affected passengers both a "duty of care", e.g. hotel, food & local transport to the extent reasonably possible and the option of a full refund to the original form of payment without penalty or fees. Rescheduling as soon as possible or at a later date are also options.
Whether cancellation compensation will apply is fact-dependent and there has been no official determination of the cause. That cause and the reasonable measures available to prevent it will likely determine the result.
In a massive situation such as this, I suspect that BA will make a unitary decision and stick to it. If BA opts to simply pay, that takes time. If it asserts an extraordinary circumstance, this will not be case-by-case.