I see what their calculation with driving 3rd party users to 1st party is, but I really feel like it’s such a suit decision. 3rd party users tend to be power users, so driving even a fraction of them away disproportionately affects content. I think the loss of that content is going to outweigh the hypothetical gain of them looking at ads, because everybody agrees, 3rd party users are a tiny percentage of total users.
I don’t think this will kill Reddit. At least not lights out instantly. People are being hyperbolic. The kinds of people who scroll r/all won’t even notice. That page is repost bots and corporate and political propaganda, it won’t change. What I think will happen is the quality and amount of content on competitors, like Lemmy, will rise as displaced power users settle. If enough power users settle in one place to create critical mass, that creates competition.
Of course this discussion is like talking into the wind, as neither you or I have the ear of people making the choices at Reddit.