What will actually happen ...
The judicial review seeks to have this exemption removed from the act, on the grounds that it is incompatible with the GDPR and the EU Charter of Fundamental Rights
The government will have this exemption confirmed in the act, by amending the GDPR and withdrawing from the EU Charter of Fundamental Rights
p.s. even if the court decides against the Home Office, they'll just carry on. There are a long list of court cases they have lost and simply refused to comply with.