This mapping does not match any actual decisions in blackmail. First, it’s not a simultaneous choice, it’s a branching multi-turn decision tree. Second, there are more than 2 actions available at various stages. Either of these would make prisoner’s dilemma analysis suspect, together it becomes much more like multi-street multi-bet poker than like PD.

The “victim” first makes choices (or is born into a situation) susceptible to blackmail. The blackmailer learns of this, and has at least 3 choices: publish the information, threaten to publish, or bury the information. The “victim” in the threaten-to-publish (blackmail) case offers incentives (which may be the same as the requested fee, or may not) to bury rather than publish, and the blackmailer chooses which action to take. Even leaving out true defection cases (accept the money and publish anyway, or killing the blackmailer), this is a fairly complex payout tree, and the correct choices are specific to the situation. In fact, since parts of the payout tree are unknown to one or both players, it’s likely that mixed strategies come into play, to prevent exploitation of the unknowns.

This math is exactly why we say a rational agent can never assign a perfect 1 or 0 to any probability estimate. Doing so in a universe which then presents you with counterevidence means you’re not rational.

Which I suppose could be termed “infinitely confused”, but that feels like a mixing of levels. You’re not confused about a given probability, you’re confused about how probability works.

In practice, when a well-calibrated person says 100% or 0%, they’re rounding off from some unspecified-precision estimate like 99.9% or 0.000000000001.