It looks like Tesla was already prepared with the contracts because people could already transfer FSD on Thursday. By then, many had already thought about how to best take advantage of the transfer offer, sometimes by finding loopholes in the contract. It looks like Tesla thought of this, too, because the terms are air-tight. After people published the conditions on social media, it became clear that Tesla's offer was rather poisonous.
For once, the transfer can only be made on a new vehicle delivered by September 30, whereas all the new launches are scheduled in the fourth quarter. This rules out replacing the old vehicle with a refreshed Tesla Model 3 or a Cybertruck. The terms are also stricter than what Musk said during the earnings call, mandating the new cars to be delivered instead of ordered by September 30. The contract has many limitations, and you have a lot to lose if you move forward with transferring FSD.
Once you sign the contract, FSD deactivates on your existing vehicle up to one week before delivery. This is non-reversible, so if something goes wrong with the delivery, you're screwed. If you cancel your delivery or reject the new car at delivery for whatever reason, FSD is lost forever, and you must pay again. If this didn't put you off already, there's another condition that should be taken into consideration before signing the contract.
Unlike vehicles bought new with FSD, which can be sold with the capability activated to a new owner, those with a transferred FSD cannot. The FSD is deactivated when the vehicle is sold privately, so FSD loses all its value. "The Full Self-Driving capability can only be transferred once and so cannot be transferred to another vehicle or to another person even if the vehicle is privately sold," reads the contract. Tesla staff has already confirmed this to those who considered signing the contract.
If you thought you could buy a used FSD-enabled vehicle and transfer FSD capability to a new car, tough luck, you can't. Tesla excluded used vehicles from this offer, so you can only transfer FSD if you bought the car new. On the bright side, you don't need to trade in your current vehicle to benefit from this offer. You can keep it or sell it, that's up to you, but either way, it will lose access to FSD as it is transferred to the new Tesla.