The problem is that privacy tools like this will severely hurt Facebook's business.

Facebook uses its pixels to track purchase and browser history. This purchase and browser history is a crucial part of their lookalike audience technology, which in turn is one of the most critical components of their advertiser tool suite. Without this data, advertisers will be less effective at targeting their ads, which means lost ad revenue.

It's not surprising to me that Facebook is backtracking on this and vying for other privacy improvements that don't hurt their fundamental business as much (like letting users view how advertisers got their contact info, or letting users view page ads).