No, that's not the same thing. A senior-to-common conversion costs the companies nothing at all, not a single penny of cash. It also greatly increases all forms of regulatory capital. To the companies that conversion is all upside, no downside.
"Pay[ing] off the SPS LP by dilution" is not a good way to phrase it at all. Treasury would get cash from the conversion, but that cash would come from outside investors, not the companies.
If the LP ratchet continues then yes, this is likely going to be the case in the future. It's even true now: FnF make around $25B per year right now but the LP is more than $250B.
The current situation is worse than if the 2012 NWS had never happened, but it is better than if the 2012 NWS did happen and the September 2019/January 2021 letter agreements didn't.
You seem to be misinterpreting what I have been saying. I said the letter agreements help the companies relative to what had been in place before those letter agreements (full cash NWS). That's the only comparison that can be made because this world in which the 2012 NWS never happened is a counterfactual.