Their strategy seems to be that they think their left flank is secure and they need to pull to the right to secure Tory voters who are now at a crossroads with how diminished the Tories are. Will they go to Reform? Will they go back to the Tories? The Lib Dems? It seems that Labour think some of the toughness without the undertones that Reform often has might grab them some of their voters. Maybe the implosion of Your Party gives them a feeling of more security on the left flank.
But yeah, this abandonment of the issues they traditionally represented to try and attract the soft centre right voters might not cause their traditional base to vote for the Tories. But it might send their centrists to the Lib Dems, their lefties to the Greens/SNP/etc and their "I just want change, any change" supporters to Reform. Along with increasing apathy and reducing turnout on their former core. Polling certainly seems to indicate that this is happening.