I would guess, as an outsider, that it'll basically stop as an independent project and carry on to whatever degree its tech get absorbed into this new project.

There's lots of cool tech in Daala, but I'm guessing that most people involved would be happy to see a royalty-free video codec succeed even if it wasn't entirely their baby and if the member corporations can throw enough lawyers, engineers and existing patents at the problem, then less sexy, more traditional tech will probably get the job done and make Daala's strategy less relevant.