Pretty much. The implied plan is that they want to replace the keyword/rule-based automatic moderation system moderators have access to with LLM-based automation.

So if you had a subreddit that banned all use of the letter e, you could whack a rule up to remove according to criteria .*[eE].* which would have it remove all instances of the letter e.

The new system supposedly replaces it with a prompt-based system, where all messages run through an LLM, and you write out a prompt informing it what it should remove (“remove all messages containing the letter e”).