I think the main thing Cloudflare is trying to do is block direct traffic from frontier labs and then start charging them for access. They might end up shooting themselves in the foot, as this simply empowers sketchy residential-proxy outfits to undercut Cloudflare and sell the data to labs for less.
The problematic bots are all disguising themselves as Chrome and sending requests from millions of residential proxy IPs, and the only real solution to those is some sort of captcha or PoW page on first visit.