Very interesting take, I'm no crazy SEO expert, but I am pretty familiar with the general tenants... I would be very curious to know what kind backlink strategy or spammy crap they were pulling as you elucidated. It's pretty rare that legitimate sites get dinged much during these massive updates. Usually there's a dip as sites adapt, take on better practices and move onto bigger and better things or are rightly left in the dust as irrelevant.
I still believe this is primarily a publicity move or their next hire should be an SEO expert hahah.
From my understanding, the update was aiming at bad UX websites so that could be the problem. Again, that's no big deal and is fixable since they have a fantastic backlink profile. As you said, this is all probably a publicity stunt and if that is the case they are even douches than I thought.
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