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This should be a pretty well-known attack by now.

I remember that Kraken allowed free lightning withdrawals though.

Which wallets still exist that are custodial and that do free withdrawals?

Asking for a friend? haha

Is it WoS?

No, the post mentions they actually had the best security among those tested:

6. WalletOfSatoshi

WalletOfSatoshi charges the user the exact fee for the routing. It also does hold a reserve of 0.3% balance in case of unexpected high fee. This is the most conservative take together with that of OKex, in turn making these two services the least user friendly.