Stock buybacks–Why are they happening and what do they imply for regular investors?

I just saw that companies are buying back their own stock at a record pace, and this activity represented 6 times the volume of households buying in the market in 2024. This is mind-blowing, and I can see a few ways to take it. Also, I might be missing the point or the info might be misleading. For example, how did they count my money managed by Vanguard or whoever in my 401k?

1-It could mean that the companies think their own stocks are drastically undervalued, and that might imply that despite measures like P/E ratio sending us the signal that the market is overvalued, the people in the know see it differently. However, counter-intuitively, the chart I found showed that buybacks were lowest in the 2008 crash and the covid drop. Those are the times that the companies' management should have seen their stocks as undervalued. Maybe they were too focused on survival at that point to find the cash for buybacks(?)

2-It could imply that they are using the buyback strategy as a substitute for investing in the future of their companies. Perhaps they are trying to get the price up to catch a bonus, to increase the value of their own holdings, or just to give shareholders good feelings about their management as they see the price go up.

3-It could imply that the managers of these companies see few opportunities for investment, and they are just 'circling the airport', waiting for opportunities to come along in the future. Maybe this could mean that a crash is likely in the near future.

Am I correct to think that today's levels of buybacks are unprecedented? What is driving them? What do they imply that rational individual investors should do in response, if anything?