Could This Be Happening?

You betcha they will.

Will prices just go up to cover the costs?

Is there really any doubt about how business works.

Regardless of the origin of the phrase "there is no free lunch", it is nonetheless true

Catching up to European regulations. At least someone is considering the customer and not just how to get the customers’ money.
Prices would increase with or without this.

https://www.transportation.gov/briefing-room/biden-harris-administration-announces-final-rule-requiring-automatic-refunds-airline

Much ado about nothing. Seems these are new rules tightening up definitions and previous rules within the frame work of authorizing legislation. Any real change has to come from Congress not the administration.

From my perspective it’s just adding flight delay and cancellation insurance to all tickets. The cost will just be added to ticket prices.

Yup. Fot some reason people who wouldnt get off their sofa for a 5% profit margin hate airlines who are batteling for a similar profit.

The airlines arent perfect, but they do a good job at getting the maximum number of people ftom point A to point B

What the 'eck. Next thing you know they'll be charging extra for seat selection and checked luggage.