If the AAC wants to respond in a way that a) keeps Navy in the fold, b) keeps them relevant in basketball, and c) doesn't dilute the football product too much, they need to do the following:
1) add Rice and UAB for all sports
2) add VCU and Dayton for Olympic sports
It's possible the AAC could raid the MW but I doubt it. I also don't see the American getting Army.
By doing what I mentioned, they keep Navy happy by adding a 2nd Texas, not totally dilute the football product by only going to 10 adding former 2000s C-USA schools, and keep basketball relevant by ripping the top off of the A-10.
In basketball, they would have
Memphis
Temple
Wichita State
VCU
Dayton
SMU
Tulsa
UAB
USF
Tulane
Rice
ECU
That's a solid mid major league.