That’s the bottom line. Kindle books will now be fully locked into the Kindle ecosystem and if Amazon decides to take back something you’ve “purchased,” you’ll have no recourse. I’m done purchasing ebooks from Amazon because of this.

TIL that Kobo integrates with libraries, that means you can download and read library ebooks on your Kobo.

Yes but in their US integration, it's actually a bit more glitchy than Kindle especially if you're juggling multiple library cards. You can still make it work, and I do bother with that because my Kobo is such a better device than my Kindle, but it's more of a headache than using Libby to send to Kindle.

Kobo is owned by Rakuten who used to own Overdrive/Libby.

yep, that's exactly why I got a Kobo, so much better

Kindle does this too via Libby.

Only in the U.S.

I'm using a library card outside of the U.S. with Libby and send all my loans to my Kindle via amazon.de, works fine

Is it a U.S library card? Or a library card from outside the U.S (e.g., a German one)? That's not clear from how you wrote it. I believe it's a U.S library only thing. Libby's own FAQ says it's U.S only but perhaps they just haven't updated it.

It's a German library card

Is Libby available elsewhere?

Yes. Overdrive and Libby are available elsewhere.

my solution is to buy a basic kindle with wifi and use that to download the books, then transfer them to calibre directly from the kindle

Well yes, Amazon wants you to buy kindles.

It's rather pushing me away from kindle books because of they will be restricted. I am more likely to get ebooks from other sources and read them in my kindle.

They wish to increase sale of Kindles, but will end up decreasing sale of Kindle ebooks.