Ok, the insider view on Prof Kambhampati:
- There's no way he didn't know what he was doing, so let's do away any idea that he was blindsided or surprised by the response to his application. He was doing it to prove a point. If you are so inclined you might think it was a publicity stunt or grandstanding.
- That said, what about the points about the EDI questions ? Well - it is not an exception from hiring on merit first of all. It's a free form part to show that you are paying attention to the concepts of EDI.
- You couldn't even promise to hire a diverse group with the funding as you only get enough to hire a few grad students to assist, at most. You would likely want to make sure that EDI concepts are understood, and the reason is to reduce the possibility of "old boys clubs" developing again. That formation is anti-merit, by the way.
- So the prof basically thumbed his nose at the bureaucratic review by refusing to acknowledge the concept of EDI and his application got nuked as expected. There's also an aspect of older schools being used to getting funded automatically in the past, and not being OK with the new ways - including EDI provisions.
There's nothing in the article that says the NSERC grant won't let you hire on merit. He's saying that but it's not stated as the reason his application was rejected. They are hoping you connect the dots to that but it's not there.