Twitter's old policy prohibited targeted misgendering, which has fallen afoul of hate speech and harassment laws in a number of jurisdictions. It wasn't that "misgendering" was criminalized in and of itself, but that it often formed a part of conduct that was criminalized in various jurisdictions.
But it's also one part a commercial decision - codes of conduct are generally used to improve the user experience in a way that maximizes user intention.
You might be aware that, although it briefly scrapped it, X reinstated the policy back in 2024. I think we can safely say that it does not reflect an agenda that Musk wants to advance, but the reintroduction was driven by other concerns.
I don't know why you think Twitter happily bowed to pressure to suppress "covid misinformation". Social media companies (Twitter included) initially took an entirely laid back approach to misinformation, before ultimately bowing to intense (bipartisan) political, regulatory, and public pressure. They introduced controls of misinformation when they felt they were forced to. Even then the White House was unsatisfied with Twitters' efforts on Covid misinformation, and there was a prolonged behind-the-scenes pressure campaign. Social media companies - old Twitter included- didn't want to be held accountable for misinformation, but did so under intense and prolonged pressure.