Witnesses have described ... seeing fighter jets fly past, suggesting the passenger plane had been under military escort.
Actually, quite possible.
If there were military aircraft in the area, and ATC has an aircraft descending but not not responding, they would naturally try to arrange a military intercept. But the military would have to be quick, as they probably had less than ten minutes to get there.
From the phugoid oscillations and lack of response the most likely scenario is throttle-closed descent under no particular control - with the automatics just trying to maintain some kind of heading and a pitch attitude. Although this would probably mean greater airspeed oscillations than are apparent. If it is another hypoxia incident, this will have to go to the top of the LPC-OPC list, instead of the usual stuff.