As a heavy app user, I absolutely abhor the bait and switch, on top of annoyances such as in-app subscriptions (I don’t mind one time in-app purchases for keeping permanent feature upgrades).

In this case, it sounds like their users may have been feeling baited and switched, having invested their time into the product only to have to pay to continue using it without watermarking.

If my understanding of the above is accurate, then they may have already destroyed their trust relationship with their current users..