WS staying on the sidelines is the smart move to me especially given the current circumstances as there's a not insignificant cost to keep things as separate as you outline and so some of the benefits of acquiring TS and merging the two companies are mitigated.
TS downsizing or emerging from the pandemic in a smaller form or disappearing altogether is only good for WS picking up market share to leisure destinations from Quebec which as has already been pointed out is already capacity saturated.
TS also was unable to secure financing while in its 2-year deal with AC so is now facing a short-term cash crunch with a $250M loan coming due in June and will require
a reported $500M in financing to survive so there's much short-term TS money troubles beyond just the purchase price and all those obligations come at the worst time in the airline industry when WS is hemorrhaging money and will continue to do so for the coming 6 months before a travel rebound hopefully begins in earnest.