It's a bit of a grey area for sure, but this isn't about "giving the people of the forest" stewardship of the land in order for them to protect it, it's recognizing that they didn't sign up to be governed under the nation/province.
Any nation developing nuclear weapons will get serious problems from the nations who already have them. Native, or not.
And it used to not be necessary, to have "international standing" to have your own state. You just minded your own buisness and tried to get along with the local neighbors. As far as I understand, this is a compromise, to bring some of it back. They are still subject to most of federal law and that is not going to change. So there won't be a true souvereign native state inside of canada anytime soon.
That's not universally true as long as they don't acknowledge it. Israel has nuclear weapons and nobody is (effectively) trying to stop them.
If Canada was to ignore them and take over all land, who would stop them? It is, in the end, Canada being nice. Is that such a terrible thing?