Correct. The NPPL will not die post implementation of EU FCL. But it will be restricted to flying Annex II aeroplanes. To fly aircraft within the scope of EU law (i.e. non-Annex II) will require at least the EU LAPL which will be very similar to the UK NPPL, and for which holders of the UK NPPL will be 'transitioned' by the UK CAA (subject to a CAA 'conversion report' at the macro level rather than an individual level).
Of course the UK NPPL (M) will continue also for microlight pilots as these aeroplanes are Annex II.
DGR / Secretary, NPLG Ltd