If I read it well, it basically says that with increasing passively managed money market volatility will go up, as well as the correlation between funds.
I think the last one is correct, not sure about the first one.
Also think however that we are a long way from big effects since most actively managed funds behave more like passively managed funds anyway (index huggers). So all one does is remove management fees from the equation and be more upfront about expectations. If anything, this might decrease volatility (fewer people run in a downturn if they expect one to happen).
Unless you are scared by the huge overall inflows in the stock exchange?
Yeah, it will lead to a correction. That's the game, was bound to happen. This year looks like it will shape up to be flat in USD, so no big thunderstorm yet. It will come though, inevitably.