but there’s no incentive for Reddit to pay any money, they either start charging for the API and recoup the costs or the app shuts down and it starts costing Reddit absolutely nothing
The cost for reddit as stated in another part of the call is an opportunity cost. By acquiring Apollo instead of shutting it down they would seamlessly acquire a lot of users who would have a hard time adjusting to the native app and potentially leave the platform, so this call is still a cost to them.
The app shutting down does not automatically cost nothing. If all users move to the official app the server resources still are used but the users would at least see ads.