As you maybe can imagine ethical vegetarians and vegans do not want to just release all domesticated animals into the wild. Most of them were genetically modified by humans through selective breeding and won’t be able to survive. Some of them suffer because of the way breeding changed their bodies. The main goal is to bring the breeding to a halt. And to take measures that current domesticated animals can live their lives in relative peace.

And just to try an predict what your next two points might be: Yes that would mean that some of them would live in not so great conditions. For example the last domesticated cow will die lonely. It is still much less suffering overall than to continue breeding them.

And of course that would mean these domesticated breeds will go instinct. I see no problem with that because they do not add to the diversity of the fauna in any significant way. Stopping to breed them will increase diversity even, because there is a considerable amount of space occupied by monocultures for animal feed and the industry around meat and dairy itself.