The google term you want is "tip credit" -- it is common and legal federally and in most states to deduct tips from your hourly wage. Washington state is one of the few where tip credits are not legal.

This is a very common setup in other pay structures as well, such as commissioned sales where you are paid a "draw" (such as minimum wage) and you don't paid get any commission until your commissions exceed minimum wage.

What's more, the tip money did go directly to the driver; Instacart just decided to pay less.

It's a pretty inhumane thing to do but on the face of it I don't see how it's wage theft. Welcome to the gig economy.