It's not gonna extinguish the fediverse in the same way nobody leaving reddit joined Mastodon as a replacement. They're technically compatible, but these are entirely different styles of sites we're talking about. Lemmy and Kbin are gonna keep on trucking regardless of what happens to the Twitter-likes.
But they're definitely going to try and kill Mastodon/similar through social engineering. Everybody's favorite content creators, organizations, and brands will be on Threads, not Mastodon, and when they lock it down we'll lose access to them and end up needing a Threads account. I don't understand why anyone trusts this company won't try to secure market dominance and then monopolize it. The guy says "we'll just be right back where we are now," but this could easily decrease the Mastodon population by pulling away anyone who doesn't care about federation or open source and just wanted a decent Twitter alternative.