After receiving Nawaki's letter urging surrender, Yugakure indeed made no attempt to strike first. They obediently held fast at the village gates while convening meetings to discuss "countermeasures"—which, in reality, meant discussing surrender. Most of the higher-ups understood that the Land of Hot Water was finished and that surrender was the best option. Yet being ambushed by Konoha like this left them feeling that Konoha's victory was unfair, and they were unwilling to accept it. More importantly, they could not bear to relinquish their own power.
Although they could still obtain noble status in the Land of Fire after surrendering, as the saying went, better to be the head of a chicken than the tail of a phoenix. Being nobles without real authority in the Land of Fire could hardly compare to wielding power in the Land of Hot Water. This was especially true for the Hot Water Shadow and the Daimyo. Once they surrendered, they would certainly become Konoha's primary targets for surveillance and might even be in danger of losing their lives.
There was also the saying that a miserable life was better than a good death. They knew the gap in strength between themselves and Konoha. Guerrilla warfare might have been possible if they had begun from the start, but under the present circumstances, they had no chance of victory.
Still, they held onto one last shred of hope: if Kumogakure and Snow Village sent troops to rescue them, they might yet have a chance to turn things around.
After extensive discussion, they decided to maintain the status quo for the time being. They would neither surrender nor refuse. After all, they had already seen that Skywalker wanted to swallow the entire Land of Hot Water with minimal losses, so he would not turn hostile in the