If that is the case — that Apple’s legal department killed the project to avoid “poking the bear” — then it’s ultimately irrelevant whether Apple briefed the FBI in advance or not. It’s acquiescence, and users will be left unprotected. Not just in the U.S., where the FBI has jurisdiction, but everywhere in the world where encryption is legal… More here.
Mr G. covers this topic extremely well in the above article. It would be a real shame if backups remain unencrypted because it destroys the rest of the protections available.