Eh, this still seems at least plausibly smart strategy purely in terms of "not getting left behind." I'm reminded of the choice to enable Netflix DRM?
It is at least possible (if not likely) that "AI" becomes central to the browsing experience, so Mozilla should probably do something here.
A Mozilla that doesn't create Firefox is a failed Mozilla.
Everything else others can do. There are working charities for every single thing Mozilla does - except creating a good browser.