If I set my search engine to DDG and Firefox has a deal with Google, then my browser is going to change my search engine to Google? Of course not. When you install Firefox it defaults to Google. In the past when Firefox had a deal with Yahoo it defaulted to Yahoo.
Are you suggesting that is incorrect because all of that happened?
Maybe the death of Mozilla, the family of corporate entities, could breathe new life into Firefox, the open source browser. They haven't exactly been great stewards for the last few years. I'm not exactly sure how those vast amounts of money from Google have translated into much tangible progress for the browser.
Once this stops, there’s no way for us to keep funding operations at the level they’re at.
Good, hopefuilly Mozilla uses this as a chance to strip down all extraneous activities and focus on the core product again.
if $500m is 80% of operating costs, $100m per year sounds fine enough to continue to develop a decent browser.
Mozilla spend all the money they could each fiscal year (I don't actually know, I didn't check their budgets), trying to build products that would fund the project into the future. It's just that none of those projects made much sense, nor where they ever going to bring the the amount of money required, which really seems obvious from the outside. I can see the VPN maybe bringing in a bit of money, but no where near enough.
You are omitting the part where Wikimedia spends large parts of that donation money on things barely related to Wikipedia. Not to mention inflated salaries throughout the organization.