He probably would have legitimized Henry FitzRoy in the last resort, if he had been unable to have a male heir otherwise, and he had already made Fitzroy Duke of Richmond, Lord High Admiral, Warden of the Scottish Marches, and Lord Lieutenant of Ireland, with some talk about giving him the title King of Ireland. There was also a proposal floated during the annulment crisis that, in exchange for Henry dropping the request for the annulment, the pope would give Fitzroy dispensation to marry the Princess Mary. Also, in 1536, there was a bill in Parliament that would have specifically given the king the right to name his successor and heir, legitimate or not.
We’ll never know, though, because he died of tuberculosis at 17.
The monestry system was disfunctional in England, and the church heirarchy already agreed that the property needed to be confiscated. And over the previous 200 years, the pope had colluded with the English crown to confiscate the English propery of French orders (which supported the French anti-pope).
So the confiscation of church property wasn’t the issue. The issue was, who was making the legislative and executive decisions?
Henry VIII’s main problem was the fact there were no men in the family. His younger brother was dead in childhood and he had no Uncles or basically anyone who might inherit the throne (at the time whether women could inherit was unclear, although they could pass the throne through their lines).If say Edmund Tudor had lived, then Henry probably would not have been as concerned about the whole matter.
TO clarify, monastic orders in England had acquired a lot of property, much of which went untaxed to the point of seriously harming state revenue. This happened on such a level that the Church itself considered many of the orders highly questionable - that is, they were outright tax dodges by people who weren’t keeping the monastic rules and basically lived however they wanted. Henry the 8th’s chastisement of such orders wasn’t especially controversial. What was controversial was the multiple later waves of confiscation and disbandment, which hit multiple legitimate orders (who just happened to be not-terribly pleased with Henry’s split from Rome).
After taking all the move-able wealth, Henry then built up a new cadre of supporters by handing out the land, and allowing us to eventually have BBC shows like Downton Abbey. (Henry liked dramas and was very forward-thinking.)
The 1547 Act did repeal teh 15334 Act, but it re-enacted parts of it, including the bit making it treason to deny royal supremacy over the church. That was repealed in 1553 under Mary. Then in 1570 legislation passed under Elizabeth made it treason to attempt to defend the jurisdiction of the Pope over the English church, which in practice was pretty much the same thing as denying the royal supremacy, except that it was aimed at Catholic deniers, and wouldn’t catch dissenting Protestants. (It was only treason if you were convicted 3 times; the first conviction was a misdemeanour, the second a felony.) The 1570 Act was repealed in 1863.