Yup. Driving away the mods by taking away the tools they need to moderate effectively means letting the site be overrun by low-effort shitposts and trolls, which in turn will drive away users who want at least a decent experience there. Considering how many awful people are there even with current moderation, I'm not sticking around to see what it starts festering into come next month.

Reddit executives know this, and they will continue the enshittification so long as it benefits them financially.

The API change is just the most recent step in this process. Making more money with fewer users is a good thing from their perspective.