> The mathematicans I know want/need journal publications as unpublished research isn't counted in their research output

If they’re untenured sure. Tenured mathematicians care a significantly deal less.

> Don't take it from me though. zbMath did a study finding 60-70 percent of arxiv papers on math end up in peer reviewed journals.

Elite journal capacity didn’t expand. There’s just a bunch of mid-tier journals helping to absorb the increased publishing to help these ~indentured~ untenured professors.