Unless they manage to make VRChat mainstream (which will likely erase a lot of its appeal to plenty of current users and will mean directly competing with Meta), this may be the beginning on its slow end.
How?
This is always a stupid call.
Open source the clients and do the hard work of server side controls to remove abusive behavior.
Imagine forcing everyone to use one proprietary web browser with DRM because webdevs could not be bothered to implement rate limiting and input validation.
The issue is that because there is no perfect solution even if you have a pretty good all server side solution you’ll still improve by adding client side anti-cheat.
Anti-cheat systems are the compromise that allow games to be played on PCs instead of only locked down dedicated hardware.