I doubt this is a recent plan, nor is it in immediate response to AMD. It takes years to develop a new CPU, even one extrapolated from existing designs. My guess is Intel has been sitting on this for a while, milking the i7 until competitive pressures force them to release the new one. That's how the industry has always worked, even before Intel and AMD existed: advances are held back until needed, even if it means temporarily downgrading a design to intentionally throttle it so it's just a
little better than the competition, but no more.
Good news is it will knock prices down on i7s. However, we can probably expect the sudden appearance of a higher-end version of the i7. It'll be priced and spec'd midway between Ryzen 7 and the i9. And unless your piggy bank is overflowing, that's the one that'll be in your next build, not the i9.
For myself, I have yet to push my i7 DAW to its limits. I'll be buying more SSDs, but for CPU I'm pretty much set for years to come.