So what about leveraged buybacks?

They are a rebalancing between the portions of the business funded/owned by debt and by equity claims where the portion funded by equity claims has grown significantly out of balance as a result of interest rates (and thus discount rates) falling substantially.

Because there are large parts of the market who don't invest across the capital structure (ie they only buy debt or only buy equity), this can still lead to better allocation of capital.

The company can't sell shares it doesn't own. Think of it like a startup founder borrowing to buy out someone else's equity. If interest rates are near zero, it may make sense to borrow cheaply now to buy back stock that the company can then sell later when it actually needs an influx of capital (presumably when interest rates are higher and the stock has risen a bit). It's essentially a financial bet on the company's future prospects.

The market isn't perfect but if companies are really mortgaging their future to provide shareholder returns today, that would seem to be something easily noticed when analyzing the company's financials... thus weighing on future profitability and acting as a counterforce to the boost from the buyback.