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It'll get eliminated as a country code, yes, but that leaves it available as a generic TLD. Seen as it will be available and is obviously lucrative, someone will register it and, presumably allow domains to be registered under it. Off the top of my head, I think it costs $10,000 and you have to show you have the infrastructure to support the TLD you register, so an existing registrar is the most likely. That figure is probably out of date, it's been many years since I checked it, but the infrastructure requirement is the more costly part anyway.
All two-letter TLDs are ccTLDs.
However, several of them are not in ISO 3166-1.
Interestingly, whilst Wikipedia does say that, the language in RFC 1591 (Domain Name System Structure and Delegation) only says:
Likewise, in ICANN's PRINCIPLES FOR THE DELEGATION AND ADMINISTRATION OF COUNTRY CODE TOP LEVEL DOMAINS, they say:
In neither case do they actually limit two letter TLDs to being country codes, they only state that all country codes in ISO 3166-1 are ccTLDs. In the RFC, the author does suggest it is unlikely that any other TLDs will be assigned, but this has obviously been superseded with the advent of gTLDs. Thus I still consider it likely that the .io TLD will simply transition to being a commercial one, rather than a country one.
Having said all that, it's entirely possible I've missed some more recent rule that tightens this up and only allows two letter domains from ISO 3166-1. If I have I'd be glad of a pointer to it.
ICANN controls TLDs. Nobody can "register it."
You are technically correct in saying that it's not a registration. Instead it's a sponsoring: https://en.wikipedia.org/wiki/Sponsored_top-level_domain