There's no scenario where he comes out of this the hero, though. Their business model going forward is ads and charging generative model owners for access to user posts. Their most invested and active users -- that is, their most valuable ones from both an advertising and a model training perspective -- were using 3rd party apps.
They needed to get everyone in house under a 1st party umbrella, and they needed to peg API pricing AI training pricing.
This is what a profit-driven Reddit just looks like. Their only other option is to become Facebook and track and serve ads to users off-site, and they don't have the same kind of controls over user identity that Facebook has. Plus, it puts them in direct competition with Facebook, and Zucks will absolutely destroy them in toe-to-toe.
He's already looking at slitting Twitter's throat with Barcelona...