It seems like just a CxO dick measuring exercise.

CEO1: "We allow our engineers to use AI for all work."

CEO2: "Oh yea? We mandate our engineers use AI for at least N% of their work!"

CEO3: "You think that's good? We mandate our engineers use AI for all code!!"

CEO4: "Pfff, amateurs. We don't even allow our engineers to open source code editors or even look at the LLM output..."

I also thought it was pushing it to the limit, but I think this is just some Founder of a successful company deciding engineering was going to transform to this way of working. A huge bet, but the implementation didn't feel amateuristic or ad hoc. Just not very pleasant for most devs to work that way. I'm sure some will look elsewhere. I know I would!