He's dead.
Combo clearly was expecting a beating, as he was fine with walking off with the gang, but the moment he saw those two white blokes he knew it was going to be the end.
I like the way it ended, with Milky essentially taking the role of Combo in the original film, as like Combo was, he is now all alone, especially since Lol can tell that Milky knows something about Combo.
Personally, as much as I loved the character, I hope he is dead, especially if they do end up doing This Is England 92. Making it grim like '88 and setting it to the grunge music scene would really work IMO.
BTW, according to Andrew Shim (Milky) on twitter, that entire cafe scene was ad-libbed, all of it. If so, that's brilliant, it was an incredible scene.