I think part of this is preempting concerns that the EU could ban or limit X / Twitter.

They've already fined X heavily for lacking transparency, like not providing a database of advertisers or allowing researchers to access internal data to evaluate misinformation concerns. The EU has threatened that if they need to they may ban or limit X.

Musk and conservatives view X as a critical tool to spread their preferred ideology, and Musk has shown he's not beyond algorithmic and UX manipulation to achieve desired outcomes.