Nothing in this announcement indicates YouTube Music will attempt to control distribution. YouTube might give exclusive content a try (a la Spotify), but — to your point — that won't be a "podcast" in the strict client-agnostic-syndication sense.
As long as podcast creators are publishing mp3s to RSS/Atom feeds, YouTube Music is just another podcast client (like Google Podcasts was) which you're free to avoid.
My partner uses Google Podcasts because it was preinstalled. The vast majority of folks don't know that they have a choice, let alone that they should find/choose an app. Hell, that's really the only reason Apple Podcasts has any traction: it came preinstalled.
"Normal" people don't know what an RSS feed is, they don't care, and they don't want to learn. They just want to listen to podcasts.
It's up to the podcast producers to decide for/against distributor-exclusivity, determining whether OC has to use YouTube Music.
> The vast majority of folks don't know that they have a choice, let alone that they should find/choose an app.
That's... fine. What matters is whether they do have a choice if they go looking for one — again, that's up to podcasters, not up to Google.