From what I understand, it was still quite toxic, but not as directly. It basically out-competed all the other microbial life and then decimated itself in an ice age as explained towards the end of [this video](https://youtu.be/H476c8UjLXY)
It’s only because a small fraction survived that we exist.
The chemistry of breaking water apart for energy with the sun’s light could have kept going, the oxygen didn’t become a factor as much until the seas were saturated by it. But it caused temperatures to drop covering the oceans in ice thereby cutting off the sun to most areas. Mutations evolved to help a little but it was ultimately the oxygen changing the atmosphere that got them.
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