Aside from the principle of it, there are also several aspects of the proposed law that go beyond what many people consider to be reasonable. Most notable for migrants and tourists is the emphasis on preventing and penalizing "foreign interference", which doesn't sit well in a city that is still the most multicultural in East Asia. Allowing the mainland security apparatus to set up offices in the city is also concerning, given mainland law enforcement is famous for disappearing and torturing people who do not support the single party dictatorship.
I think it's fairly clear that this is an opportunistic power-grab by the central government. The coronavirus has allowed them to dramatically increase the intensity of their security measures in the mainland, instituting Xinjiang-style movement tracking apps, "temporary" barricades and checkpoints all over the country. The state media has whipped up intense anti-American hatred, and the government is emboldened by the fact that America is dealing with the virus comparatively poorly. There is a widespread public support for cracking down on Hong Kong, which has been presented here in mainland as a city besieged by terrorists and American agents of chaos, all out to destroy China. I suspect from the point of view of the central government, being able to advance their timetable on the takeover of Hong Kong is the silver lining of this pandemic.