Supposedly you can avoid degradation by using synonyms. But not all words have synonyms. The more concrete and factual the prose, the harder it is to watermark. "Cow" is not a synonym for "cat" and "dark matter" is not a synonym for "galaxy."

So the watermark words will be biased towards filler and fluff where invisible substitutions are easier, and the content is less (cough...) load-bearing.

The likely outcome is the development of AI watermark strippers which filter out all the twitches and tells that make default AI writing so annoying.

Google seem to have given up on SynthID for text for now, so this is likely a harder problem than it looks. My guess is Anthropic announced this to meet regulatory requirements. But they don't have a robust detector, and I seriously doubt they have a robust system that can survive trivial rewriting by a different model.