Discouraging high retention actually is a bad thing, yes. It encourages bait and switch paywall tactics, and makes it so there is no reason to make beyond ten minutes of playable content per day in a game. This also has so many conditions it makes the money barely acquirable for most users, even ignoring the paltry amounts and wait times.
My games aren’t grindy. This is literally going to cripple my income so badly I won’t make back my ad money. This is going to force me to implement microtransactions which I otherwise didn’t need and had no interest in implementing, because I have solid community retention and playtime, just to keep earning equivalent revenue. It will literally force me to make my game worse and less fun to play.