I think its going to end up a successful move for them.

They built a platform. The users built the site over the years with minimal interaction from reddit.

They now have a platform, millions of users, and full control of what they want on that platform.

The writing has been on the wall for a while now, they want the traffic but don't want the problems that come with mostly community driven content.
All the profile redesigns, ability to "follow" users, profile pics, awards, all that has been an indication of the direction over the last few years. The last few steps was to kick out the problem users and be left with those who don't really give a shit and just want to see memes on their phone while they take a shit. The people who hear about reddit and just grab the official app from the store. The people who don't care about APIs and protests and modding or accessibility tools. Just eyeballs to look at their ads.

Those people will stay. It doesn't matter if 25% of the community leaves, because the natural growth in the next few months from the eyeballs will claw it back over time.

Once they have an obedient user base who are strictly bound to what reddit want them to see, think TikTok or facebook users, that's when they will see off. And it will pay off handsomely.