I think this has done damage to Reddit, but it'll be death by a thousand cuts rather than a big instantaneous failure.
To be honest, I really don't care what happens to Reddit at this point. I'd rather have Kbin be a smaller, more dedicated community than have it "kill Reddit".
Most social networks have this "growth at all costs" mentality that is usually the root cause of enshittification. When I say 'smaller', I mean it more in terms of fostering a healthy community of dedicated contributors rather than trying to make the fediverse grow as much as possible as fast as possible. This is why I mostly support the notion of preemptively defederating from Threads. While it would help the fediverse 'grow', that's not necessarily what I want out of it. I don't want us to win, I want us to be good.
Reddit demands moderators remove NSFW labels, or else (www.theverge.com)
Article by The Verge, providing details about various subreddits and their mods getting threatened because they are labeled as NSFW