On one hand it sounds reasonable. Your employer is going down the redeployment route rather than mandatory redundancy.
Your situation sounds very similar to what my employer did several years ago.
A lot of roles were being offshored to India. Affected staff were offered redeployment, which would be followed by redundancy if a suitable role could not be found in the organisation.
If a role was found that the company believed you were capable of doing (i.e you had the skills), you were expected to accept it. There was a 3 month trial period for the above scenario, with some retraining factored in also.
If you declined the offer of a suitable role you were considered to be resigning and were not entitled to any redundancy package.
If, after the trial period, the company & yourself agreed that the role was unsuitable they’d look into further redeployment opportunities, or failing that offer a redundancy package.
On the other hand, your employer could be using it as a mechanism to change your contract – hence the reduced holidays and capped bonus …