The vast majority of Firefox users either don't use extensions or only use an ad blocker. I downsized to the same myself quite a while ago for performance and stability reasons in Firefox despite being one of the niche users that used to keep 10 extensions installed. Yes, there are quite a few different niches of users that use specific legacy extensions. But the legacy extension system is a mess and has been holding Firefox back for a while. Mozilla is going to fully embrace WebExtensions and keep moving it forward to enable as much functionality from old extensions as possible to serve several of those niches.

I'd argue that many of the users that choose Firefox over Chrome do so for the fact that Firefox is 100% open source and isn't tied to an advertising giant trying to capture tons of extra private data from you. This won't change that. It will mean you can't change the layout of the entire Firefox window and add tons of new custom buttons and things like that. But most users don't care about that.

For the niche that can't stand using a UI they can't fully customize, they're free to use a slower and less secure browser that continues to support XUL and the associated extensions while still keeping up to date with at least the slower Firefox ESR branch of renderer underneath. Pale Moon, for example.