Rules and regulations are not inherently bad, but as they grow out of control they rapidly transition from being a net positive to a net negative on society. Go try to navigate the thousands of relevant pages of legalese full of esoteric and counter-intuitive laws in e.g. California just to open a food stall. Your utility cleaning sink is only 9" deep? Time to shut you down, it needs to be 10"! In the current state of the US it's generally unlawful for a kid to go setup a lemonade stand in their front yard. The US has rapidly transitioned towards becoming quite anti-capitalist.
But of course this was not always the case. It's hard to pinpoint when exactly we started transitioning to the current era, probably around the 60s. And this is really the point. 'Not true communism' can not really pinpoint any era in communism as 'true communism' because the ideal and reality simply don't exist in the same plane. And while e.g. the 50s were not necessarily the penultimate example of what capitalism can yield, they were at least a really great example - as it was a time period that struck a balance between rules and regulations while not hampering individual entrepreneurship and innovation.