Not the case in my experience. Nobody is backing out from server-side checks and nobody is spending a ton of money either developing or purchasing anticheat to appease “non-technical stakeholders”, such as they are.
Riot Games is a perfect case study where this exact thing happened, IMO.
League of Legends had millions of MAU and a near zero incidence of cheating, for a ~13-14 year span. They implemented root-level AC for their next game, Valorant, and they ran into aimbot problems within weeks. Root-level AC was rolled out for League a few years later, despite vocal objections from their developers, several of whom were vocally against the move on r/leagueoflinux.
Overwatch is another example of a super-popular game that manages to stay cheater-free using only heuristics and player reports. They’re doing dramatically better at stamping out cheaters than Valorant, CoD, and other comparable games that include root-level AC.
Are there any counterexamples where you've seen a game struggling with cheaters fix the issue with root-level AC? I can't think of any, but maybe my gaming pool is just too narrow.