As I understand it, they just said they aren't going to do it because is not technically feasible, but the bill includes the clause to do it, if it was possible.

I can't see anything to celebrate here. The bill should have been amended further.

Source: https://www.theguardian.com/media/2023/sep/06/whatsapp-signa...

They didn't change the bill, but also said "If the appropriate technology doesn’t exist which meets those requirements, then Ofcom will not be able to use clause 122 to require its use".