They definitely do. On both Twitter and Meta related products, posts with links in them get heavily downranked in the algorithm. It's why so many influencers have the link in the first reply instead.

And yeah, it's definitely a bad thing for the internet. Honestly, I wonder if someone could argue it's an anti-competitive behaviour that should be banned?

webrings used to be the essence of the internet. And then somebody business minded decided why should I help ANY other website.

Downranking is bad, outright blocking is far worse.