The "instant approvals" probably will only be available...

The "instant approvals" probably will only be available to...."pre-approved" people at checkout.
So someone with $0 in their account would most likely not be pre-approved.
Its new credit (regardless of what people say) and up to the bank or fintect to take the risk and deploy it how they want.

MC is effectively enabling a BNPL suite of tools as a feature to customers (banks and fintechs and merchants)

Its not a MC BNPL...it is open BNPL tools for its customers to promote and to increase payment transactions on MC rails.