The most important aspect of reddit is variety of moderation. It allows rules to be tried, ideas to be experimented. Allowing communities to self regulate by having their own mods is what makes it so unique. Mods get crazy, people create a new subreddit and things move along. Doesn't work for the huge subs for stolen content or quick bait but it works wonders for smaller communities.
Spez decided to reject that and focus on reddit as a mainstream platform, and as such, disallow and get back the power from the communities and their mods. It'll lower the weird good quality the site has and they will never compete with tiktok for mass attention.
You're right that reddit owns the website, but they don't own the communities. And right now, they're loosing peoples goodwill as well.