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Very, very,wrong. The capital is directly reflected in each share being worth more. A smaller number of liquid, public shares of the same value company makes each share worth more. The wealth is evenly distributed to shareholders.

Mostly wrong. The shareholders who receive cash no longer have the shares. So if the price received is less than the value, then the shareholders profit. But if the price paid is greater than the value, the shareholders lose. Since 2013, 60-90% of buybacks are at prices higher than value, depending on company and price.

Many buybacks are done with borrowed money. The interest rate on the buyback is usually short-term, say three years. If the interest rate rises during those three years, then the company will (assuming not enough cash to pay the principal) roll over the loan at a higher rate. Interest rates have been rising for two years now, and the Federal Reserve intends to keep raising rates until the Dims control Congress/White House again. Virtually all public companies in 2018 have more debt than cash/short-term investments. Dividends go to all shareholders, although some pay current income taxes on dividends.

Buybacks are similar to buying expensive machinery. The company is out the cash. Different, because the company has no asset to show for the outlay. So a company valued at $1 billion that does a $100 million buyback should afterwards be valued at $900 million, with about 10% fewer shares. If the business generates profits at a rate greater than the interest rate (paid or received), this can be a plus. But if it misses the chance to buy a better business, then a minus.