I have to say, this is an...interesting move for all parties.
For WWE, it's another step onto broadcast (even if the CW isn't what it used to be), but it's WWE's developmental brand, meaning the performers aren't going to be as polished and it's not going to me as big a show as you'd see on Raw or SmackDown! (NXT used to tape at Full Sail University, but moved to a makeshift studio at the WWE Performance Center - AKA the Fireworks & Laser Warehouse - during the pandemic. They've since made improvements to the PC site and refer to it as the "Capital Wrestling Center", an homage to Vincent J's old branding.) That being said, if WWE is finally positioning NXT as a legit third brand, this is the way to go.
For CW, it's interesting because the dirt sheets had been reporting that a deal was all-but-signed with Billy Corgan's NWA to bring their improperly spelled show, "NWA Powerrr", as well as a BTS reality show, to the CW. Apparently that all got scuttled when their Halloween PPV featured talent openly snorting 'cocaine' on camera, but given the rapid announcement of the NXT deal, there are some that are doubting whether the NWA deal was even a real thing.