Pretty much that YHWH in the narrative is depicted as regretting that he made humans, and that the deity experiencing regret and “human-like” feelings didn’t seem to pose any “theological problem” for the authors. With a few debates and disagreements from some scholars, but the majority would adopt this “straightforward” reading.
See the concise note from the JPS Jewish Bible:
5–8: Whereas in ch 1 God seven times “saw” what He had made and pronounced it “good,” this passage reports that He saw how great was man’s wickedness and regretted that He had made man. The flood narrative that ensues, a characteristically Israelite adaptation of a well-known and widespread Mesopotamian story, emphasizes human immorality as the provocation for the cataclysm. Most strikingly, the narrator depicts God’s heart as saddened. The sudden mention of Noah (v. 8)—whose Heb name (“n-h”̣ ) is “favor” (“h-̣ n”) spelled backwards—indicates that human perversion and divine grief will not be the last word.
https://www.youtube.com/watch?v=5bA0OigwXR4
Note that the mention of YHWH having regrets is only found in the “non-Priestly/Yahwist” Flood narrative, not the “Priestly” one. (The Flood story actually being composed of two different narratives intertwined together.)
On that point, and composition issues, see this short article, and that one on thetorah.com, discussing and separating the two textual “strands”. Chosen excerpt from the former:
Thus, those passages employing the divine name “God” (Hebrew ‘elohim) present a deity who is transcendent and systematic in carrying out the flood. The precise measurements of the ark (Gen 6:14-15), the age of Noah before and after the flood (Gen 7:11; Gen 8:13), and the recurring references to specific days, months and years (Gen 8:4-5, Gen 8:13-14), all seem to derive from this source.
Conversely, those passages employing the divine name “the LORD” (Hebrew YHWH) depict a deity who is intimately involved in the action, including grieving over human wrongdoing (Gen 6:6), regretting having made humankind (Gen 6:7), personally closing the ark as the inundation begins (Gen 7:16), and taking pleasure in Noah’s sacrifice following the flood (Gen 8:21).
Other differences include the duration of the flood (“40 days” in Gen 7:17; “150 days” in Gen 7:24), the number of each animal entering the ark (“two of each” in Gen 6:19; “seven pairs of clean” and “one pair of unclean” in Gen 7:2), and the types of birds sent to determine if dry land has appeared (“a raven” in Gen 8:7; “a dove” three times in Gen 8:8-12).
https://www.bibleodyssey.org/articles/two-flood-narratives/
https://www.thetorah.com/article/a-textual-study-of-noahs-flood
https://yalebiblestudy.org/resources/the-yale-bible-study-on-the-book-of-genesis-with-dr-joel-s-baden/
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Does the author of Genesis 6:6 believe YHWH is omniscient/ all knowing and omnipotent/all powerful?
The short answer to your question is no. James Kugel’s book The God of Old: Inside the Lost World of the Bible, which details how God was not originally perceived of as all-everything. Regarding this specific passage, look at Dr. Steven DiMattei’s exposition. And DiMattei states the following on another part of his site:
http://contradictionsinthebible.com/does-yahweh-regret-and-change-his-mind-or-does-he-not/
http://contradictionsinthebible.com/conflicting-portraits-of-israels-deity/
To a large extant [sic], the Yahwist’s anthropomorphic presentation of his god and the fact that this is not a problem for him has led many biblical scholars to see this as one more element that supports the tradition’s ancientness. The gods in the literature of other ancient Near Eastern cultures were depicted in similar anthropomorphic terms. As modern readers of these ancient texts, we must keep in mind that our culture’s conception of God, along with highbrow theological tenets such as omniscience and omnipotence, are later modifications and conceptualizations of the biblical god which were adopted from the Greek philosophical tradition and brought to bear on the biblical texts in the theological debates of the early Christian period. Nowhere does the Yahwist attempt to present Yahweh as omniscient or omnipotent. Indeed he would not even have been familiar with such ideas. In the biblical traditions, such notions do not emerge until the literature of the exilic period and even there only in the exilic Deuteronomic tradition and deutero-Isaiah. But the oldest traditions preserved in the corpus of ancient texts we call “the Bible” presents Israel’s god in terms that would be shocking, even offensive, to the modern reader. These earliest portraits have indeed been softened by later non-anthropomorphic portraits of Yahweh.
I’ll also point out that after the Flood narrative, God promises to not again destroy the world with a flood, as he realizes that humans are inherently prone to evil. But this is one of the reasons that the Flood was sent to begin with!
Genesis 6:5-7:
5 Yahweh saw that the wickedness of humankind was great in the earth, and that every inclination of the thoughts of their hearts was only evil continually. 6 And Yahweh was sorry that he had made humankind on the earth, and it grieved him to his heart. 7 So Yahweh said, “I will blot out from the earth the human beings I have created—people together with animals and creeping things and birds of the air, for I am sorry that I have made them.”
Genesis 8:20-21:
20 Then Noah built an altar to Yahweh, and took of every clean animal and of every clean bird, and offered burnt offerings on the altar. 21 And when Yahweh smelled the pleasing odor, Yahweh said in his heart, “I will never again curse the ground because of humankind, for the inclination of the human heart is evil from youth; nor will I ever again destroy every living creature as I have done.