I think there's a very good chance you're right. Their reputation is obviously severely harmed, and high profile projects like Ghostty leaving may be a canary in the coalmine.

Something creative like separating their free and paid tiers may help them. I suspect the fact that all of this is happening to them along with their migration to Azure is probably complicating their ability to adapt their infrastructure.

What if I told you most enterprise customers don't even use the cloud offering and aren't impacted by any of this? Companies like Apple use GHES, and honestly thats where most of their revenue comes from, not the free offering.