This is actually a fairly common trend across the country to reduce incarceration rates. Oklahoma voted in 2016 to raise the felony threshold for theft from $500 to $1000. I was very leery when it passed because I thought it would lead to higher theft rates, but our theft rates have actually dropped. Felony convictions for theft have also dropped.
This might not work everywhere, but it seems to have been a positive for our state.
I do think though that there is a difference between making a felony a misdemeanor versus flat-out making it not a prosecute-able crime.