Releasing their own wallet does not mean they are trying to make bitcoin centralized. Using a government wallet which requires KYC is a huge privacy risk, sure, but it doesn't change anything about bitcoin for any of the rest of us. The government I see trying to centralize bitcoin at the moment is right here in the US, saying they want to be able to link every address to a real person and have the power to reverse transaction.

They aren't forcing anyone to use their wallet. They are simply releasing a wallet, and giving each user $30 in bitcoin for using it. There is nothing stopping someone from withdrawing that bitcoin to a different wallet, although I would do so via a mixer to break the link between this KYCed wallet and your own wallets. Releasing what will hopefully be an easy to use wallet is a smart idea, actually. They are trying to onboard ~6 million people, many of whom will not have a great deal of technical know how. Having a single app which they can provide straightforward support for is a good idea, while still allowing more advanced users to move to a better wallet.