A few counter points can be made here.
Yours is a very US centric view. As one example, in several Central and South American countries, Facebook is everything. It's where everybody is, and this weird western idea that mingling with old people is "not cool" isn't a thing there.
Facebook is nearing 3 billion ACTIVE users. Astonishing to call that a niche. It isn't shrinking or stagnating, it keeps growing.
Last, the obsession with non-teenage users somehow being the death of a social network is ridiculous. Most people in this world are not teenagers. Adults have all the money, and all the political money.
Who cares what teenagers think is cool? Teenagers are idiots and they don't have any money. They aren't going to grow up in your service, they'll dump it within 2 years.
There is no reason that social networks have to be run by firms as unethical as Facebook (i.e., there is no reason for social networks to be run as unethically as Facebook's is run). Please don't bore us with any "the market is always right" arguments. The people in "Western" nations who have decided to use Facebook less (and perhaps, other social networks more) have better taste and more agency than the people you're talking about. Those people should also acquire better taste and more agency.
How do you know?
[0] https://www.buzzfeednews.com/article/meghara/facebook-myanma...
Absolutely, Zuckerberg is basically a younger, less human version of Rupert Murdoch. He's going where the money takes him, and he's happy to exploit a profitable niche. My point though is that it's increasingly clear that Facebook's audience is becoming just that, an aging niche, and that's not a great place to be for a social media platform. We know what happens to those.
Just like Rupert Murdoch's various tabloids, exposure does indeed affect the consumers of that media, and it becomes an ouroboros of tabloid-type hysteria. I don't think that's what bothers facebook though, just the fact that this type of niche audience is a loser in the long run.