It's a good update, although to me it felt as if the events taking place in Austria-Hungary are overly dramatic and take place too quickly. A-H was surprisingly resilient in OTL, and even up to late 1918 the general mood across the whole Empire was not to pursue unlikely independence but to reform the Empire to a more acceptable structure. It's telling that, for example, the National Council of Slovenes, Croats and Serbs did not even discuss independence from the Empire until the end of October - and even then, they only declared independence because they reached out to Karl and he basically told them that they can do anything they want. In the timescale which this update is taking place, the Croatian and Czechoslovak independence movements were still rather embryonic.
To Hungary, these terms were completely unacceptable, and despite having initially given the Emperor benefit of the doubt to protect Hungarian interests after the issuing of the Völkermanifest on July 2nd, by July 14th the Hungarian political elite had grown tired and concerned about the new proposals. In Pressburg, violence had already erupted between the two various German, Hungarian and Czechoslovak authorities while further in the Slovak heartland talks of rioting or revolution had begun emerging, in Transylvania Romanian separatists began protesting outside of Civil Service offices demanding the same autonomy as offered to the Poles, Ukrainians, and Illyrians. Thus, Prime Minister of Hungary Wekerle that day issued a notice to the Austrian Government effectively as an ultimatum; Austria would reject the Illyrian terms, Hungary would take ownership of Dalmatia and the Condominium of Bosnia and Herzegovina, and Vienna would reject Czech demands for an integral Slovak element to their own autonomous zone, while outright vetoing Romanian autonomy. Failure to provide Hungary assurances of these demands, which Hungary had many times been promised and in some cases the Emperor had no power to legally institute anyway, would result in immediate Hungarian absolute autonomy from the crown as itself an independent state - even if Karl would still be invited to remain 'Emperor' in name.
Sándor Wekerle was flexible towards the Croatians though, wasn't he? That's one of the reasons why he was appointed as the Prime Minister of Hungary, afaik. Tisza was very uncompromisial both regarding suffrage reform in Hungary and the creation of a Habsburg South Slavic entity, Karl I sacked him in 1917, Wekerle was appointed as a figure who could agree to some form of compromise towards the Croats. Granted the Tisza faction was still dominant in the Hungarian parliament and Wekerle effectively ran a minority government so I suppose he could still be pressured to do something.
a political crisis further escalated when the actual governing body of Croatia, the Sabor, which was governed by the 'Croat-Serb Coalition' who had been entirely left out of the Yugoslav committee, now passed a motion demanding the establishment of an autonomous Croatian state within the Empire, united with Dalmatia, rather than take part in the Illyrian proposal.
...what? The Croat-Serb Coalition was the leading force in the Yugoslav Committee. Out of the Committee's leaders, Hinko Hinković and Frano Supilo were some of the most important and both of them were the Coalition's founders. Not only that, but they were
the leading Yugoslavist force in Croatian politics. Once Yugoslavia was formed, they formed the core of the unitarist Democratic Party, the Coalition choosing to abandon their historical Yugoslavism in order to back an autonomous ethnic Croatia inside Austria-Hungary is a complete breach in their positions. After all, it is the "Croat-
Serb Coalition" - the Serbs living on the Habsburg side had no interest in supporting Croatian dominance.
Perhaps you confused the Yugoslav Committee with the Zagreb Resolution which later paved the way for the formation of the National Council of Slovenes, Croats and Serbs, and it excluded both the Croat-Serb Coalition and the Peasants' Party - however, this Resolution was made in opposition to Yugoslavism, and was an Austroslavist proposal which aimed to establish something akin to the compromise later presented in the update. In addition, it involved the Coalition very quickly and was hijacked by Yugoslavist ambitions once the collapse of the Empire came nearer.
In Prague, the Czechoslovak national council officially, legally declared independence for Czechoslovakia on June 1st 1918, declaring Karel Kramář as interim Prime Minister, Václav Klofáč as Minister for War, and the still in exile Tomáš Masaryk as President, though for all intents and purposes Václav Klofáč acted as Acting President.
Odd to see Czechoslovakia declared earlier in a world where the Central Powers are more successful than OTL. Well, to me personally.