Mods had power because they were united and reddit couldn’t replace all of them at once. Instead, they picked them off one by one.
My guess is that they decided that the little fictitious power that they had over their communities was worth dealing with an obnoxious administration, that outright belittles them as “landed gentry”. As such, they never actually planned any sort of migration out of Reddit, and instead rationalised their decision to stay there as “we’re thinking on the users”.