I feel the complete opposite about this -- it's a really good example of management not just making a conceptual decision but diving into the details and making a call, but with respect for all involved. Note that:
* The chairperson joins in and speaks with authority. This isn't a VP of eng making a call about two repos.
* It's not a binary decision - "cancel development, fire the people affected, leave the product to wither on the vine" - but a nuanced one: don't make decisions that make Firefox worse, I don't pretend to have all the details but will give you an example of one decision that I have an opinion on and who you should look to for advice (the platform and infrastructure teams)
* Recognizes that it's not just a technical call but has legal and community issues, and tells you who will be sorting those out as well.
Management is hard -- you can't just make a blunt statement and expect people to fall in line, especially in open-source projects. Would you have preferred a harder line? Do you think that would've been better for the community in the long run?