Yeah it's a general "rocking of the boat" so to speak, whenever anyone is going at it this aggressively it generally leads to widespread bad decisions among the competition, other agencies in their weight class might feel threatened and proceed to debut MORE talent to not get outdone and therefore end up only saturating their market further. And yeah if it crashes and burns then that's a lot of people who are going to go down with the ship.
We have certainly entered an era of instability, with Niji loosing steam and vshojo eating the scraps, with phase and idol battling for the 3rd spot in EN, with Brave throwing money around and amassing properties like crazy and with so many smaller projects constantly appearing, growing and then imploding, I literally have no idea who's gonna be left when it calms down again.
It's not like 2021-2022 where Holo and Niji traded Ls and Ws while smaller groups grew organically from the afterglow of the boom, now the boom is over and it's a free-for-all in the EN side of things.