It's been my experience that many restrictions that are meant to he helpful really help only established companies with deep pockets, rather than those it is meant to help. That's why large companies don't object to a lot of things that they know they can absorb, but will destroy their smaller competition.
I speak with a lot of small (typically one-person) game designers, and they are facing the problem that the cost of art is prohibitively high, and yet products without art sell far less, to the point that you wouldn't bother if you're actually looking for any sort of return. Or, as in these people's cases, if you're looking to break even so you can make more stuff.
In the case of Foundry, the Foundy shop has been a great resource for people looking to make some really incredible projects. I suspect that many of them will go back to entirely using things like Patreon and having the users update via something like Github, and entirely bypass the store and even the internal module locator.
And that will make it harder for people to find products they're looking for. And it will stifle the development of the software. Many people don't realize it, but a ton of the content people use in Foundry started with a one-person passion project.
I also know how decisions like this come about. In my RPG world outside of ENWorld, I discuss on a board where AI discussion is allowed. There are frequent flame wars over someone's posting where they used an "em dash", which AI likes to put into documents. And as someone who knows the difference between an em and an en dash, I use both. But a lot of people are scared off from even discussing ideas, or heaven help them if they share something!
I work in a job that will likely be gutted by AI in the next 10-15 years, but I believe I will be able to work that job until I'm ready to retire. I have Data Scientists who have lost their jobs. I say that because, even though I'm not pro-AI, the fact that I can discuss it, and understand why it's useful for small shops, makes me out to be a shill for it.
So a ton of people will be happy for this, but I also suspect they don't interact with small designers who are going to not create products they'd like to see.
Edited to add: now that I'm reading through the thread further, it is about what I expect. I'd just ask you to consider how negative the reaction to AI is, and how it has been consistently bad for the last two years. And yet, it is marching forward. I have a friend who wrote news for several small towns in a region. He is now out of a job, and the "paper" he worked for writes from AI from that region. And it is, as you might expect, garbage. But that didn't stop it from happening. He switched into the tech field and, like me, has found a niche where he's likely to be able to ride things ouy.
Much like everything else, AI is a tool. And it can be a tool that helps small publishers just as it can large ones. In the end, the large publishers will still be here, and likely fully using AI in two years. The little guy? Gone.