It was fairly major at the time, and a publisher smaller than Rockstar might have faltered under it. At the time digital distribution wasn't a thing yet (or still in its infancy. Steam came out about a month after the original console release, and the PC release of GTA:SA was only a few months later.) Games still came in boxes on physical media sold mostly in brick and mortar stores. The original shipment of GTA:SA was required to be classified from Mature, to Adults Only, which most stores would not sell. Rockstar was, in order to continue selling it, required to produce and ship an entirely new set of media and packaging and take back what they'd already produced, presumably to be destroyed, as there was basically nowhere it could be sold. As part of the settlement they also had to take back any already purchased copies, replace them with the new "censored" version AND give a cash payout to basically anyone who requested it. Luckily the requests for such a thing were fairly minor, only a few thousand, as most people playing the game didn't give a crap.
It's only the fact that despite all the media and government attention that very few customers actually gave a crap about it, that made it blow over. It was an annoyance for Rockstar, but didn't kill them.
Today it wouldn't be nearly as big of a deal, as even consoles have the ability to patch out stuff post release now. Digital distribution has changed a lot.