That's the hash war phase. It comes when the outlaw period fails.

The States mines empty blocks, and the market fights back by increases fees to motivate more hashpower to come online and overpower the censor.

It's a little more nuanced than that, but that's the general idea. 

 plebs can’t outspend the state on hash power, other states will have to help protect bitcoin if it gets attacked by nation states

https://youtu.be/MTk1mPRJe_U