For them to be effective at returning money to shareholders, the action of buying stock is intended to take stock out of supply thus increasing share price value. Exactly as you say.

Yet, this is clearly a form of stock manipulation, as it's an action to manipulate the share price.

Whilst it is stock manipulation, it's debatable if it should be legal.

I believe it should be legal, it's an efficient way to increase share value without adding to someone's income, thus often carries no immediate taxable obligation.

However one could argue that these methods of moving wealth around without taxable events triggering adds to the fuel for calls to tax unrealised gains on all stock.

So in the long run we are all worse off.

Those laws will likely come regardless, as a way to fight the billionaire class, so stopping stock buybacks at this stage is unlikely to do anything.