If the risk is a lawsuit after years of anticompetitive behaviour - if they're unlucky - that's absolutely worth it for Google. Chrome is now THE web browser platform with the only two remaining notable exceptions being competitors in name only, and no single lawsuit can just reverse that.
Google is doing more "eternal irritation by 1000 papercuts". Never one big blow, never aiming to kill Firefox, they're financing it after all. Firefox needs to exist but never be attractive to users, especially on the phone where tracking is next level.
I think plausible deniability does a lot of the heavy lifting here. But statistically speaking Firefox being the one browser hit constantly by a stream of random Google issues can't be random.
The legal and regulatory landscape changed a lot since then too, with Big Tech slowly but constantly lobbying and pushing a lot more than just these tactics into normalcy. A lot of what's normal today was outrageous in the '90s.
Interesting theory, but that's exactly what M$ got dinged for in the antitrust suit re: Netscape.