Let me share my friend's experience with you guys I hope it will give you a lot of Relief.
He applied for PSW when it was about to close.
Got Rejected not meeting criteria.
Lodged appeal, went to Tribunal, high court, supreme court
Result: Rejected.
He has spent two years on appeals.
He was two or probably three months to complete ten years,
Applied on 10 years rule basis and He got his ILR recently.
So there is no break of continuity if your appeal is rejected. He has applied for his ILR within 28 days of rejection