Absolutely appalling. It's a clear anti-consumer trick to lock you into Meta's ecosystem. There's no benefit to the end user at all. It's just boosting Meta's numbers so they can sell ad space for more money.
If an existing Instagram user signs up for Threads to try it out, and they decide they don't like it, they're stuck with the account forever anyway.
If a new user wants to try Threads, they have to sign up for Instagram too. That way, if Threads doesn't take off, all those new users at least have Instagram accounts they might use instead.
With Facebook and Instagram, Meta has clearly shown that they're entirely capable of making separate accounts and linking them together. They could have copied that same model with Threads. It took them more design work to make a worse user experience.