It will be interesting to see how the new 200 hour PPL instructors deal with difficult questions from PPL students on the modular route who already have ATPL groundschool in the bag !!!
Not everyone is on his way to an ATPL. Some people just want to be private pilots. Many of them learn to fly in clubs. That's where the shortage hits hardest. Right now the requirement for Instructors to hold a CPL means flying clubs are relying on the old guard and a few hour builders biding their time. This change will allow club members to become Instructors without going through all the hoops. They won't expect to be paid anyway.
That's why I see this as a good thing.
I honestly cannot see aspiring airline pilots with 200 hours or so getting their FI rating onto their PPL so they can start instructing for peanuts. To what purpose? At 200 hours their money would be better spent on getting their CPL and IR. Which is what they really want. It would be a pure distraction to get an FI rating. It's still going to be 30 hours flying and a bit of ground school. It's putting the cart before the horse. With 200 hours in your logbook you need to be looking at getting your CPL Multi/IR. MCC etc. So that you in a position to apply to an airline.