Sequoia are a lot like the interior western red cedar where I live.
99% of them are hollow to begin with. You can live in a hollow stump that's 16' across but just 6" sound wood for a shell.
The rot can start in a 20 yr old stem and go on for a thousand years.
Here in BC, mind you, the reverse is true for coastal cedar = most are sound and solid, regardless of age.
Cutting the hole did little to alter the water/nutrient budget of that tree.
The "barely alive" statement is editorial judgement. Those trees always have broken gnarly tops.
So do our cedars. No big deal.
The far greater problem in the forest management of the Giant Sequoia in California is fire supression.
The under story is so dense with crappy brush that new Sequoia seedlings fail for lack of light.
There aren't any new ones (and that really surprised me to learn.)
By contrast, the fire cycle in BC is 70-100 years.
Everything burnt to a crisp and start off again with the serontinous pines.
Of course, there are several seral stages of succession to get the pines out of the regen veg (willow, then alder, etc).
Long enough and spruce is the climax just as Interior western red cedar and hemlock are the climax veg at my place.