That's my read of how IA & publishers summarize the agreement. The IA has usually focused on things not available elsewhere, like out-of-print works – even the "National Emergency Library" was aiming to replace lending opportunities destroyed by pandemic lockdowns/shutdown, not compete with normal functioning avenues for borrowing widely-available titles, and let rightsholders opt-out.

Just formalizing the automatic exclusion of all these publishers' in-print ebooks is no loss at all, compared to the rulings so far in the lawsuit. It is a bit unclear to me what happens if the IA gets a more-favorable ruling from their appeal - have they still agreed to not perform 1:1 lending of physical-book-derived ebooks for the plaintiffs, even if they win the right to do so?