> it isn't the landlord's business what a tenant is doing inside, working or sitting around watching TV

Unfortunately the government is extremely interested in what you do in your property, and this makes it the landlord's business. That said in this case, it seems more like homeowners are renting out a small unit behind their home, and want to disincentivize people who will be there more. Personally if you can work from home I'm not sure why you'd live in a bay area suburb, especially not walnut creek, but to each their own I guess.