Students faced a ternary choice prior to the Fall semester: 1. enroll as an on-campus (and thus live in a dorm), or 2. enroll as a remote student (and thus live at home), or 3. take a leave of absence (and thus live wherever)
Only students in that second bin were subject to the requirement stay out of Providence. A cynical take on this is that Brown has always had strict residency requirements for its students, and residency fees are far above the market rate in Providence. If students could simply mark themselves as "remote" to get out of paying dorm fees, I'm sure many would.
The other key bit of context is just how poor of a job Brown did at geolocating students. Dozens of students (some international!) received baseless notices of reprimand. The most compelling theory I've seen is that these students were using Brown's VPN, and were identified as on campus via IP geolocation.