Agree with you the impact is not predictable.
Very generically we can say breaking to upside or breaking to downside, but the impact of these two will be vastly different.
Breaking to downside, i.e. USDHKD > 7.85, likely will happen if HK is under very high stress economically and financially. It probably will happen after a certain period of defending the currency. Something like what George Soros did to the bank of England. If that crack happens, it will really sweep the Asia financial market like the 1998 Asia financial crisis and we will see HSI easily crack 20/30%.
Breaking to the upside, USDHKD < 7.75, will just be some kids play. It probably happen if CNY strengthens too much and HK SAR decided that pegging to USD is too volatile for the country. But since it is a 'choice' by HKMA whether to depeg or not, it will be managed orderly and we might even see stock markets going up because of better rationalizing of currencies.
So the bet is then which side of 7.80 will the crack occurs. Like said, HKMA and PBOC has too much firepower to allow a crack above 7.85. They are not likely to let that happen. Rates will go up sharply but end of the say HKD shld still hold below 7.85.
Kyle Bass's position and article might sound like big stuffs, but i don't think he studied sufficiently of the HKD exchange rate system to start his positions.