I don't think McD loses the locker room (yet). Peterman played well in the preseason and he's technically a "veteran" as compared to Allen. McD probably did right by not just handing the rookie the job. Benching Peterman after Baltimore will help McD in the locker room, not hurt him, because it shows the team that McD is (in theory) trying to win games and put the team in position to be successful. McD might've lost the locker room if he started Peterman this week.
The owner's box is a different story - if Allen gets hurt because of the lack of protection around him, McBeane have some 'splainin' to do. And I still can't believe the Bills took a bad 2018 cap situation and made it worse by needlessly taking a $3.5M flier on Corey Coleman for a two-week tryout, only to cut him loose (despite lack of talent at the WR position) and now they're effectively paying him to play for the key division rival... if I were Terry I'd be FUMING.