I am a native English speaker and interpreted it the opposite way. "Pacing" a race doesn't mean slowing it down, it means setting the pace, the person in the lead sets the pace of the race.

So my natural understanding of "pacing the frontier" is that they believe they are in the lead and are setting the pace of AI development. It does not imply they are slowing things down at all, it implies they intend to stay in the lead.