1. As a private company, they don't believe they should be responsible with setting public policy. They want a separate board to be set up for that.
2. By default, everything should be private.
3. They're proposing that if an applicant has a compelling reason to access raw data, they need to have it approved by the governing board, and raw data is automatically destroyed after a short interval.
They gave the example of video feeds, which are both common in public spaces and are not anonymous (even if you blur faces). If they're being thoughtful and responsible, they need some mechanism to handle desirable exceptions. This sounds like a proposal to do so.
In the article, the person who resigned is presented as a respected expert on the subject. Maybe that person has more context that didn't make it into the article. But the facts presented - "group designing public space is proposing policy to handle aspects that can't easily be made anonymous" - don't warrant the clickbait title or the editorialization.
Sounds like Sidewalk is doing it's diligence - thinking about the things a group designing a "city of the future" _should_ be thinking about.