Cynically, I take this to mean that he’s given up on the possibility of a 2024 presidential run.
While this will undoubtedly be popular with Californians who don’t give a shit about homeless people and just don’t want to have to see it, it would almost certainly have led to some blowback in the middle of a Democratic presidential campaign, so it’s safe to assume that the decision was waiting in the wings so to speak - ready to be implemented, but only when it wouldn’t cause problems for his federal aspirations.