They announced this a week ago (ancient history, I know, but I didn't see it until know and couldn't find any other threads mentioning it).
I have to admit to feeling a little bit unjustifiably
annoyed. I moved a bunch of money out of the NJ MM fund, precisely because I had WAYYY too much NJ exposure and
because they said they weren't going to participate in the insurance plan. I ditched the MM fund after they made that announcement mostly because I figured everyone else was going to stampede to the exit. Which appears to be the case, given Vanguard's reversal.
On the one hand, I did the right thing by reducing concentrated credit risk in my portfolio. On the other hand, I'm a little miffed at missing out on the extra "moral hazard" returns provided by the guarantee.