I view that as a possibility, but at what point in that process do the British decide they’d rather drop Japan than the US?
In OTL, the British only ditched the alliance under duress of sorts. It was the price the Americans demanded for the WNT. So, even though few in Whitehall wanted to lose the Japanese alliance, they ditched it anyway, because they prized a serious limitation of naval arms more than they did alliance with Japan, because Britain was nearly broke. (In the long run this backfired pretty badly on U.S. interests, but that was not so apparent, maybe, in 1921-22.)
Well, in this timeline, that calculation won't be there. Britain, whether it be with Bonar Law, Croft, Churchill, or even Adamson or MacDonald in Number 10, is not going to be prepared to drastically hack down the RN with a first rate navy operated by a European hegemon right across the North Sea. Due to their parlous finances, they really can't afford to build like the maniacs they were in 1895-1914, but no naval agreement with Berlin is going to make the paranoia in London go away. Most of the G3's and N3's are likely getting built here, along with a serious commitment to development of formal ASW capabilities. Unfortunately for Britain, this means the Americans are going to be building a lot of super dreadnoughts, too...
Anyway, what other levers could the U.S. use? Debt repayment is the one obvious one I can see. I'm not sure that's enough, but maybe it could be used to push modest modifications of the Alliance treaty at its next renewal?
It could also be that Bonar Law (or his successors) try hard to pursue some more formal strategic relationship with the U.S., to counterbalance Germany, especially if attempts at rapprochement are not bearing fruit. If so, that could be a *positive* incentive for abrogating the alliance. The thing is, the way our author paints the U.S.'s stance, it seems unlikely that the U.S. is going to greet any such overture with any enthusiasm. Odds are, you could get an even more isolationist America than what we got in our TL.