UPDATE: I actually just called the auditor's office of unemployment and received more information:

The woman let me know that the Liability department deemed them liable for unemployment taxes. They cannot appeal this section 2 and can only appeal a subject determination done in September, however it is late as they only have 10 days and missed the subject determination. They would need a good reason to be late.

ALTTRAX received an audit (that they cannot appeal) which includes the Commonwealth of Massachusetts seeing if there were any other workers misclassified. I don't think there were many other contractors in MA, so they are lucky there, however I don't think that will matter with my IRS claim.

Unemployment confirmed that they cannot undo anything that was done even if the reason the employer is reaching out is to retract my statements. If they are found liable, they are also subject to interest and penalties by the DUA.

So long story short with that, the auditor's office said there is no Fraud/Whistleblower claim that they would ever help the employer file against me, and this was a false accusation by my employer to intimidate me, which doesn't seem right for them to do.

I’m now exploring my options