This whole part is a bit “hmm” for me.
The precedent is that their children wouldn’t be princes or princesses. Liz could overrule that if they all wanted that to be the case, but it’s been the trend for a long to have fewer HRHs knocking about. Security isn’t tied to titles either. Princesses Beatrice and Eugenie don’t have any publicly funded security for example.
Also, was this the sticking point for the whole thing? If Liz had ponied up a title and some bodyguards would Harry and Meghan be happy to suck it all up and stick it out?