Trying to think a decent analogy to explain this situation. I've actually read some comments try to argue that the devolved settlement wasn't made with brexit in mind and thus the UK government has no obligation to concede further powers.
That argument cuts both ways though. The devolved settlement was made with view that the UK is a member of the EU and therefore the settlement should be different and a clear majority in Scotland support devomax so the idea that in this game of tug of war that Westminster should somehow win is complete trite that I'm sure unionists and nationalists will both agree on. Not to mention it further undermines the position and core reasons for holding the referendum in 2014 that many people believed would be dealt with.
So, Mundell could very well be right. Westminster could concede more powers than we have now but those powers could turn out to be superficial and meaningless. The old give with one hand and taketh from the other. For example, the EU stepped in and funded renewable energy when it was cut at Westminster and the freedom of movement has been useful at aiding Scotland's declining and aging population problem since we can't control immigration or foreign policy to the point where you read about American and Canadian families being deported from Rural Scotland that has an active campaign to resettle.
These are not powers that Westminster couldn't concede before nor powers that are being returned from europe, but examples of shared legislation that Scotland has had no say on that is now going to be dictated by a polarized conservative/labour government in Westminster exacerbated by a democratic deficit.
We've seen the whips prevent any political freedom or dissent within the conservative party as the Scottish Conservatives demonstrate their absolute uselessness. We've seen Scot Labour MPs bow to the hard-brexit whip despite saying they wouldn't support it. It's pretty safe to say that this won't work except for a few fleeting moments.
Never thought they'd actually be dumb enough to go through with it.