It's a bit of a dilemma reading their policy:
We believe in the open internet and in keeping Reddit publicly accessible to foster human learning (...) Unfortunately, we see more and more entities using unauthorized access (...) especially with the rise of use cases like generative AI. This sort of misuse of public data has become more prominent as more and more platforms close themselves off from the open internet.
We still believe in an open internet, but we do not believe that third parties have a right to misuse public content just because it’s public.
Being a open/public platform, but still wanting to protect user's content from being used for AI could be a good thing, and I guess also what many fediverse users would want for this platform. Making a distinction between AI and search indexing could indeed be difficult. But then making content deals with Google for search indexing and AI training is a bit hypocrite.
Who should be regulated, Google or Reddit? Reddit updated there robots.txt to disallow everything. As it's their site, I guess it's also their right to determine that. They then made a deal with Google, which I guess is also not abusing a dominant position by Google, as Reddit could have made a deal with anyone.