Education is a commodity that the university is selling. If the product delivery is defective, then there will be avoidance of that product by the consumers (students) until there is something done. There will be lots of complaints. Your particular class seems to have dealt with this individual situation productively.
But OP, listen up here. You appear to have won the war, but now you're still grousing about the distribution of booty and supplies. Forget your test grades in this particular class for right now. Don't try to argue this out with the administrators who changed the teachers. It is not their issue to deal with or fix for you.When the new instructor is given the class, she/he will be given final grading autonomy, at least in every occasion I have ever been familiar with.
If everyone from here on out begins to complete the work and make passing grades, it is possible the instructor will elect not to average those first tests into the mix. If they do, and you and everyone else in the class has these terrible beginning grades, they may grade on the curve and give each of you a statistically correct grade in relationship to the other class members, not a strict numeric grade based on all the tests.
But you do not need to be fighting this war any more at this point! Stop going on and on and on with the issue, as you obviously have a tendency to do. Persistence is a good thing, but when you've won the argument, stop talking! You've gotten out of finishing the class with this bad instructor. Now quit arguing with the higher ups and demanding that your earlier test grades be dropped. They're not going to give in to that one, especially not now.
If at the end of the course, you have passed all the new instructor's tests with flying colors, there will be time to point that out (IF you do not get an adequate grade to pass this class). Your point will be much easier to make when you've proved that you were completely in the right and the fault was all on the instruction quality, not on you or the other class members not being persistent and competent in doing your work.
Good luck and I hope this poor teacher gets better or sees the handwriting on the wall. As I said, I have seen this situation several times in educational settings. In any case, it is not your problem any more after you finish the class, get the credits you need, pass your boards and move on into a career. Don't keep beating this horse to death, it's one class, and you'll be done with it soon.