So, for people who don't understand Xrd or how this thing works, here's what I've gathered through testing of my own and what I've seen around.
So, the OS itself is basic. You input a special move, then end the input with a FD input. If your opponent triggers proximity guard, the special move is triggered due to some engine/buffer quirk and comes flying out. If proximity guard isn't triggered, you just get FD instead. It works the same as the SF4 OS, but doesn't require to whiff move, can be used more freely, and has much less negative consequences overall.
This means you can use it in a huge number of situations. In neutral, you can input a special move at a spacing where it would beat most buttons, and if they hit a button boom, your special move comes out. If they don't hit a button, you safely cancel into FD. If you're being pressured, you can input something similar to a fuzzy DP OS with 6231FD+DP, and if the opponent decides to leave a gap where they would block or otherwise do nothing, that DP doesn't come out and you're relatively safe. This makes some high risk/high reward situations in the game drop to minimal risk.
That's pretty neat, so how do you deal with it? Well, you can intentionally attempt to trigger an OSed special move, but most smart players will probably only be using this in situations where that wouldn't be detrimental. Proximity guard hitboxes exist during the start up of most moves, so you can even kara the start up of a move into FD to trigger the OS, but again most players won't be bothered by it, and the hitbox only exists for a couple frames so it's very difficult to perform. If somebody is doing this during pressure, you can actually just throw them since throw won't trigger the OS and they'll default to blocking. It adds this weird layer of safety to a lot of options, but its application isn't super bonkers yet.
Now here's the problem. When you perform this OS, you're going to get one of two possibilities. You're going to get special move or FD. In the case you getting FD, you can immediately layer another input on top of this OS if you choose. You can actually input YRC OS if you have the right amount of meter to safely get a situation that is just raw in your favor a pretty fair amount I'd guess. Applications such as doing proximity OS and then committing to an option that beats delay mash or block already exist in theory, but testing them they proved super difficult so I have no idea how far that will go. That's the scary part of it, if it does develop that route people will be taking situations and creating minimal to no risk solutions for them to have all these options spew out probably in their favor.
That's all assuming there isn't some way to tangibly beat the OS ala SF4, and also assuming human beings can do these things in a practical setting. That's a lot of assumptions so there's no need to like panic and think this destroys the game, but it has potential to go crazy places. Best case scenario is the OS isn't feasibly applicable all that much and most of the cast can play a similar game with it in consideration. I mean, Xrd is already a game with lots of silly OSes in it. Worst case scenario is it's very applicable and risk/reward in certain situations gets fucked and characters who can really use/deal with this skyrocket in power.
My guess at the moment is it's applicable in specific situations and has lots of room to develop with adding layers to it, but it'll take awhile to implement and figure out where it fits. If we're lucky this gets removed before it has time to develop in that direction. So it's somewhere in the middle, characters who have strong options with this you need to take into consideration(especially in neutral situations), but it's not like shaking the foundation of the game unless it does develop out of complete control.
Disclaimer: I'm not a hardcore GG player, I'm just somebody who spends a lot of time trying to tear apart fighting game engines, particularly the more anime ones. I'm not a genius either so I could be completely wrong, just what I've got from my understanding through others and what I've personally fiddled around with.