Totally correct. It’ll take a while, but the quality will absolutely drop. And even though 3rd party apps represent a small percentage of Reddit users, I’d bet that people who are engaged and participate enough to get a third party app for their phone (many of which required payment to block ads) are the same people providing a lot of the quality content that makes Reddit successful. When the people who produce the good content leave, then it’s only a matter of time before everyone else follows.
Be sure to remove as much as you can and heavily encourage heavy contributors to delete their comment history. They have no value without our data.