As a former department chair: I would absolutely have suggested that you strongly consider medical leave, and I would not have passed this situation on to the Dean's Office until you figured out what you wanted to do. Better for your health, more certainty for the department...what's not to love about a win-win? Of course, I'm no longer a department chair, something about not being a team player with the admin ;)

For medical leave: Check your state's policies for covid leave and check your institution's policies before you "nail this down". Make sure you understand how leave works. And make absolutely sure that your paperwork doesn't remove any of your medical leave rights. If it gets close to the semester and you are still ill, you want to make sure that you can take medical leave without serious financial repercussions.