From the video I saw that described the hybrid drive train, the ICE only fully engages with the wheels above 62mph (this is one reason why the fuel efficiency starts dropping off significantly above this speed). Below that, it's the electric motor only fed off the HT battery, which the ICE is replenishing. So, dud HT battery means no tractive force.
I couldn't get a straight answer from Honda about what their 5 year warranty actually meant. I specifically asked if there a level of degradation at which they will replace it. They couldn't tell me.
Suspect going forward, like other EV's, there will be a number of 3rd party replacements becoming available. I wouldn't be surprised if some enterprising companies will start offering higher capacity batteries at some point. There are companies that fit higher capacity cells to Nissan Leafs, for example.