Twitter's rule against 'misgendering' didn't just apply to people who were engaging in harassment though, it applied to everyone, and led to many campaigners for women's rights being banned from the platform.
One example is Meghan Murphy, a high-profile Canadian feminist. She was discussing the case of a trans-identifying male who had sued several female beauticians - who offered their services solely to women - for refusing to do a Brazilian wax, which for this individual would have involved the handling of male genitalia. She referred to this male as 'him', and as a result was banned from Twitter for about four years (with her ban only being lifted after Musk's purchase of the company).
So on one side we have a trans-identifying male who was using the Canadian legal system to try to punish women for refusing to touch his penis and testicles. On the other side, a feminist writer who referred to this male as 'he' and 'him' while criticizing him for this. In applying their 'misgendering' rule, Twitter took the side of the former and sanctioned the latter.
By removing this rule, Twitter is allowing feminists like Murphy to speak freely about issues such as this on their platform.