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I'm not sure you understand what this means. "States rights" is a slogan, it's not like codified law. Nothing is "in effect ". Federal law always supercedes state law, and the US Congress 100% can tell CA what to do here.
California's response will be interesting to see, as if they choose not to, then the federal government will come down on them (and trust me, they're obviously looking for excuses)
Not really. Congress can revoke the ability of CA to have stricter standards but they can't force them to continue to register IC engine vehicles.
CA still controls which vehicles they will register within the state. They can't prevent someone from driving into the state with a different registration but they already don't have to register a project car from Colorado that doesn't have fenders. Even Texas can refuse to register that project car. This is already established.
Oh, and they can impound that fenderless project car from Colorado for not meeting their road regulations.
Which would only affect CA, as you pointed out. It would do nothing but hurt CA.