Serious questions: won't banks and ratings agencies simply treat this as Meta's debt since it it effectively Meta's debt? What changes if this was on their "official balance sheet"? How does playing with the wording actually help Meta overall?

The crux of this article is that they won't treat Meta's debt as debt, because Meta intentionally structured this debt to circumvent the agencies' definition of "debt." Should they change their definition of "debt?" Maybe, but what incentive do they have to do that, is any formal definition bulletproof to circumvention, etc.

What's very interesting to me is what happens when Meta doesn't exercise those lease options. If there isn't some kind of penalty for declining the option, well...

As in the 2008 crash, the ratings agencies were disincentivized to accurately rate these vehicles because they were superficially masked and paid by the companies asking them for ratings.