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I suspect you may be being a little too literal here. It is an existential risk to the software development house.

I agree and nothing I wrote conflicts with that assertion. The point is that it depends on the individual's perspective and the complexity of the issue at hand. Restricting choice is often an advantage because it saves us time in exchange for the risk of being (company, individual or humanity) wiped out by an exception to the rule.

Hmm typically I've heard the phrase existential risk alongside a qualifying / local scope phrase.

So something may be an existential risk to this company or this endeavour. Only a small fraction of usage of existential risk are globally scoped to humanity.

It’s an existential risk to a business’s survival