As the above have said, this doesn't damage AP in any way (the same way the MoonSwatch and Swatch Fifty Fathoms only HELPED Blancpain), and is making Swatch relevant again as well.
From Swatch's perspective: They sell expensive plastic quartz watches that are in basically every way worse than a Casio/etc (or any of the other dozen of quartz watch manufacturers. Other than 'they are quirky!' there hasn't been a reason to even THINK about Swatch's name in a few decades. They didn't have a hold on the higher end quartz (Citizen, Bulova, etc), and charged too much to compete at the low end. So Swatch was/is in this weird irrelevant middle-ground of "high school girls who want a watch with weird colors"). And even that was being taken away by Apple watches.
The Moonswatch got people actually TALKING about Swatch for the first time I can recall in my adult-lifetime.
From Omega's perspective, the Moonswatch hype, visibility, and popularity was a boon. We all talk about how rare people notice our nice watches. THIS is a problem with the younger generation, non-smart watches are less popular with Millennials & younger than ever before. The generations that grew up with cell phones in our pockets and computers in front of our faces, never really saw the need for watches.
The MoonSwatch added an interesting mix of noticability, coolness, and HERITAGE in a way that Swatch hadn't done in the past. Moonswatch's obnoxious colors are a feature in that regard, they are noticable in a "hey, what is that on your wrist?!" kinda thing. And getting peoople talking about the MoonSwatch is good for both brands.
ALL of the above they hoped to re-capture with the Fifty Fathoms (and I don't know how successful that was?), and again with this AP, which is part of why they are doing this goofy hangs-off-your-purse design. its about getting people to notice to keep AP/Swatch relevant in a newer generation.