This is nothing new. The regulators have been raking up strange points of disapproval for a while now. It's not poor regulation or anything,just a lack of consistency. So,some years back they had introduced ASM..an algorithmic surveillance system(experimental too,as they themselves stated) whose purpose was to curtail manipulation of penny/illiquid stocks. However,a lot of stocks went 30-40-50x for no reason in the same interim and there was no surveillance on them. While some perfectly decent companies were put in the category.Thus putting limits on the number of investors who could buy the stock and hence subduing the stock performance.

As u/vineetr has pointed out these are band-aid solutions. Their heart is in the right place,they are just not sure of the means to express their intent imho.