A negative feedback loop is one that tends to keep things in a steady state. The thing being described here is actually a positive feedback loop with negative consequences.
I looked up “negative flywheel” and is corporate mba jargon, it seems to be an evolution of the business management term “flywheel effect” but for negative situations… except it’s more contrived because the business world already defined that as a “doom loop” which at least makes more intuitive sense.