They don't have the manpower to moderate subs without unpaid volunteers. That's the beginning and the end of this, rather desperate, sort of bluff.
> The regional admins now have direct control over their subs. Fear will keep the local subs in line. Fear of this battle station.
Sometimes mods ban people without a good reason. For example, people who posted in the lockdownskepticism subreddit were banned from some other subreddits at the whim of the moderators. I don't know if Reddit taking over would lead to worse moderation.