And that looks like it will be the end of that. Virgin have just issued this on social media:
We are very mindful of the response that our announcement about recognising people who have served in defence has had today. It was a gesture genuinely done to pay respects to those who have served our country. Over the coming months, we will consult with community groups and our own team members who have served in defence to determine the best way forward. If this process determines that public acknowledgement of their service through optional priority boarding or any announcement is not appropriate, then we will certainly be respectful of that.
Looks like they’re backtracking on the proposal.