I give it 5 to 7 days until reddit the company forcefully removes these mods
The impact of this would be to make lots of subreddit unmoderated, leading to a huge amount of spam, adult content in sfw subreddit, cross-posting, etc. The impact would be to let everyone know just how much free work the mods do to keep Reddit tidy and valuable.
I don't think you're wrong (except maybe on the timescale) but I do think the strategy would shoot the CEO in the foot again.