Couldn't other shareholders sue the government for tanking the stock and essentially "stealing" value from them?

No, they still own the stock, the government hasn’t taken anything from them. The stock might be worth less money the same way a house might be worth less money if a city government decided to stop repairing the road in front of it, or if the city relaxed zoning laws, but the price of assets in the market isn’t a responsibility of the government, and it generally does not incur liability when it causes them to change.

I think a more appropriate example would be if the government did some work around the house and in the process damaged the house, thereby lowering the value. The thing being damaged is shareholder confidence, which I thought (but IANAL) taps into different securities-related laws.

If the government damages physical property it is frequently liable for the cost of repairs, but to the extent that a share of Twitter stock represents something that can be damaged, that thing is Twitter itself. If through illegal meddling of some sort the government impaired Twitter’s ability to do business (say, for example, by flagrant targeted refusal to grant work visas), then the company or shareholders could have a cause to sue the government. The government is under no obligation to avoid impacting Twitter’s share price, especially as a side effect of some unrelated fully legitimate exercise of government power like auctioning off seized assets.

"The government" isn't doing anything here.

Elon and Twitter have a contract. Elon wants out; Twitter doesn't want to let him out; the contract only has limited conditions to allow Elon out. The court is simply deciding which of two options is the case:

1. Elon's reasons are valid; he gets out of the contract for a $1B payment.

2. Elon's reasons are not valid; he has to satisfy the contract and pay $54.20/share for Twitter.

If the judge decides in favor of #2, it is Elon's responsibility to come up with the money. (If he doesn't do so willingly, someone court-appointed will step in and do it for him.) If that tanks Tesla, that has nothing to do with the court.

Now, Tesla shareholders can sue Elon for getting the company into this pile of stank....

#3: Contract is void, performance must be undone at the expense of all parties because unjust enrichment.

They could certainly try; you can start a lawsuit without any real basis if that's how you want to spend your money.

Trying to argue, in court, that you are entitled to have your investment insulated from loss due the primary owner selling it?

>due to the primary owner selling it

We were talking about the courts seizing the assets though, it's not being voluntarily sold.

Why would that make a difference. When someone defaults on a house/car the seized asset is often sold under value, nobody has any ground to sue.

If someone's car is seized by the government, it doesn't cause the value of everyone else's cars to drop by 50%, and if it did, I think people would sue the the government.