The moat a physical pro audio product is its interface and its branding. And I know that's tough to hear especially if you're an engineer but its true. People buy Strymon pedals because they know exactly what they're getting and they know its going to be in a format where if you want to dial in a tone without getting into the weeds of menus you can (but if you need to advanced features you can also do that). If people wanted the cheapest way to get those sounds, they could always hook up to a live VST host rig. But you get Strymon because you know that brand name and you know you're going to get a box that you can twiddle the dials on the floor and yes you are also getting that as close to perfect algorithm as well. The sound is part of Strymon's branding but it isn't all of their branding.
Look at it this way, pretty much every original circuit design in the analog guitar pedal space has been copied, duplicated, sold for pennies on the dollar, modified, whatever. But those companies still exist and do well because their moat has never been the circuit, its the branding.
Anyway, I hope you find some peace in the next few days. Its hard to argue that your moat hasn't shrunk and maybe you're in the process of building up that customer base. You gotta think about the copycats and it sucks, but you always had to do that. Its just harder now.