Just as science (as in the scientific method) isn't the same as Science, the community social practice and logistics and tenure rules and committee compositions and journal page limits etc, mathematics is not the same as the academic mathematics community. They are not the sole producers of mathematics and not the sole users. The funding is largely in the hopes of the usefulness of the resulting math. Not all. Some funding is like art and culture funding, for propagating a cultural legacy, like folk dance also gets funding and experimental performance theater also gets some tax funding. But that's not the bulk currently in math.
I have read the letter. It's all about stuff of holding back because they don't want the answer key because prestige reasons, and how will grad students train their brain if we have too many answers. This doesn't consider that many people, like engineers, use math as a tool. They don't want to hold math back. It's fine to think that applications are too dirty. Again, they want funding, they have to explain why exactly they should get it. And it better be an explanation that still holds water with AI available. They can do the aesthetic math as an art side project like an accountant can paint or sing off the clock. But generally you also don't pay everyone for their hobbies even if those hobbies are nice culturally rich endeavors.