I don't think it's a guide to how upset the Queen is. I think it's just that if you're going to be an HRH then you do the royal tours and have official patronages, and if you're not going to be HRH and do the 'royal' thing officially, then you can't really mix and match the bits you do like. I think the Queen would have been guided on this by the courtiers who are experts in the precedence of how things can be done and what could or shouldn't be changed permanently due to Harry's personal feelings at the moment.
I think it's more like a courtier saying to Harry, "if you want to hold royal patronages, then you have to remain HRH', and Harry saying, "but I want to give up the HRH part, I definitely don't want to keep that, so I'll just have to accept giving up the patronages that I hold because I'm HRH Prince Harry".
Harry can support things like charities for wounded soldiers, or those who have ptsd without holding an official royal patronage. And in some ways maybe he can do more from outside the official Royal fold than he could from within.
Harry and Meghan are now free to go out there and be Bob Geldofs (give us yer money for people who are suffering so we can change the world!) .... and he couldn't do that as an HRH.