Continuing the discussion from New website and rs.js documentation site:
According to this ICANN blog post, it seems like the status depends on what happens and it’s not guaranteed to go one way or the other:
Assuming “IO” is retained to continue to encode the future status of the Chagos Archipelago, there is a consideration that is particular to ICANN policies. Country-code top-level domains are operated for the benefit of the country or territory they represent. Managers of these domains must maintain an operational nexus with that country to ensure they have appropriate local accountability mechanisms for how the domain name is operated. Should this jurisdictional change take effect, changes may be required to ensure proper accountability to the new country.
There is a possibility that “IO” may be removed as an assigned code in the ISO 3166-1 standard. Should this happen, ICANN’s community-developed retirement policy will apply. In essence, a five-year time window will commence during which time usage of the domain will need to be phased out. That time window might be extended under certain circumstances.
At this time, however, much of the discussion about .io is simply speculation. Should this change in the future, those changes will be well communicated. It is not a foregone conclusion that a change in sovereignty will result in a change to the .io domain, but if that result comes to pass, ICANN policy provides a great deal of time for the community to adapt to any changes.
Nevertheless, might be good to note in general any other considerations regarding the domain and potentially moving it.