In this scenario, them defeating her and righting the story would actually put them back on their RIGHT timeline and then Neal would live since he wasn’t supposed to die in the first place.
That’s similar to what I’m thinking, yeah. The t-word that’s SUPPOSED to happen is the one where Neal and Rumple both live and Zelena is defeated. So time would move forward as per normal once they all get back to FTL for the start of S3B redo.
Sidenote: I’m here listening to the Once Upon A Fans podcast and both hosts don’t believe Neal’s staying dead, to the point where they’re specifying that they’re saying words like dead and coffin with airquotes.