TBF, this is literally the natural process of grasslands becoming scrublands.
Driven by a transition from arbuscular mycorrhizal fungi (AMF) to those that support woody vegetation, often facilitated by climate-induced changes in soil conditions. This transition is characterized by increased saprophytic (decay eating) fungi that aid in decomposition and the establishment of woody plant fiber.
In fact, it's the bacterial flora present in grassland soils that cannot break down the lignin (woody xylem polymer). Saprophytic fungi are essential to this natural transition from grassland to scrubland (and then eventually on to become forest, etc.), as the soil composition shifts per climatic changes.