I can understand your point of view, but it's far from nonsense. Thinking of warrants as being totally unrelated to recouping of treasury "investment" is more likely the nonsensical view. But.... JMO
As a FnF shareholder, you really should not want the seniors cancelled completely. That would kill the funding commitment, which in turn would drive FnF's cost of borrowing way up and reduce their income by a lot.
Instead we should want Treasury to write down/convert all but $1B of the seniors, that way it is owed very little in dividends post-conservatorship ($100B per year) while the funding commitment remains in place.
Hmmmmmm......i see your point but that is not what a shareholder should prefer post c-ship. Borrowing cost will go up in terms of securing the explicit guarantee and that should be paid for by g-fees. Those will be adjusted to match risk. I do not think a public traded company will benefit with the gov having a stake in equity in the long haul.