From the article:
To demonstrate model collapse, the researchers took a pre-trained LLM and fine-tuned it by training it using a data set based on Wikipedia entries. They then asked the resulting model to generate its own Wikipedia-style articles. To train the next generation of the model, they started with the same pre-trained LLM, but fine-tuned it on the articles created by its predecessor. They judged the performance of each model by giving it an opening paragraph and asking it to predict the next few sentences, then comparing the output to that of the model trained on real data. The team expected to see errors crop up, says Shumaylov, but were surprised to see “things go wrong very quickly”, he says.
I think that hypothesis still holds as it has always assumed training data of sufficient quality. This study is more saying that the places where we've traditionally harvested training data from are beginning to be polluted by low-quality training data