In order to force the user to change their password more frequently (long term), the user is prevented from changing their password too frequently (short term).
I wonder whether the person who added that is actually confident that the benefits outweigh the drawbacks or is that a case of tunnel vision.
Or if you want a slightly more convoluted mechanism, when someone changes their password you have both in plain-text and you can take a copy of the old password at that point -- after all, it's not being used as a password any more! For bonus fun, submit all previous passwords to pwned passwords. Password reuse makes this a bad idea in general, specific policies attempting to mandate it will not be an issue notwithstanding.
Practical/actual answer: this is stupid either way.