You make a good point that there is no way that they could explain not selecting her if she insists on replacing him. But they don't want Harris. She would do worse than Biden. Which means that they are stuck with him.
Harris could solve their problem by agreeing to step aside and endorse Newsom - but it would still be hard to explain. One of the many Democrat billionaires might give her a nice incentive to do that. But outside of bribery I can't see her doing that.