Generally, if an option is not exercised, the contractor is not due any compensation. However, if an option is exercised and the contractor provides a service or supply then payment is due. If the contractor does not provide either a service or supply, then they are not due compensation. To complete the contract or task/delivery order, there needs to be offer, acceptance, and consideration (by both parties).

In answer to your immediate question about 'Status Quo" arrangements, that is not covered by the FAR or DFARS. You are correct, that is a legal term and your questions would best be answered by your local or program legal office attorney.