I feel reasonably confident at this point, declaring this a myth. Mozilla absolutely made missteps and lost browser market share, but it had almost nothing to do with spending on side bets, if you look at the budget and you look at the numbers of these things. Most of the sidebets already happened after they lost the market share and did not happen at such prohibitive costs that they prevented them from investing in browser development. And there's no such thing as a missing browser feature they could have developed that would have recovered all of the market share, which they failed to develop because of a side bet.

Nobody who repeats this has even looked at Mozilla's budget, or checked to see whether the side bets overlap with the time where Mozilla lost market share. The one exception to this is Firefox OS, which does appear to have used significant resources and happened during a critical time where they lost market share. And while that one at least would be a fair criticism where there's real data behind it, I actually respect it as a bold strategic move and personally deeply wished it worked out. But for whatever reason, a complete disconnection from factual reality has never stopped people from claiming that the VPN or the Mozilla Foundation or whatever was the problem.