So at worse, a Dragon break would occur? Vivec already made one Dragon Break by changing time. I bet Akatosh isn't too happy about that...
Either a Dragon Break, or like your anology, everything becomes compressed into one layer, "Time Compression", Final Fantasy 8 style?
Certain events from certain histories would take precedence over the others, and it would all collapse into one line. Some events may merge, some may hit dead ends, others may take the path that they never happened, but it would have to make some logical sense through the line in order to maintain a stable reality. You could easily end up with something like Jyggalag being the supreme ruler of all existence due to never being stopped and absorbing the power of all other god figures. Note, I'm not keen to exactly what the discussion is on, as I'm not big into TES lore at the moment, Just throwing the bone as I crawl through Oblivion.
Note: I'm trying to get a feeling for the lore and get a general idea of everything.
Note 2: A far more canonically likely scenario would involve more temporal leaks between the realities that would end either in a convergence of the most stable version, or some intervention to restabilize the inherent system before they collide.
Mainly, I'm just saying a paradoxal collapse of all reality into the void isn't likely unless something provokes exactly that to happen.