Anyways, I think there are two things worth pointing out about this
1.) Part of Musk's cluelessness about this is the fact he's a billionaire. He lives in a system that rewards shitty behavior and ideas, and where the people who make these dumb decisions rarely face any consequences. He literally paid 44 billion to become a moderator, and as I've said, he doesn't get the weight of it-this isn't different from how Trump reacted to things when he was president BTW. That's an example of a man whose life was in that bubble, and when he realized oh hey this job requires actual work, he flipped out.
2.) It's also something that predates Musk buying Twitter and Trump running for president-the false, liberal belief that Twitter is a part of "the marketplace of ideas". Politicians and journalists all jumped in, believing it's more important than it actually is. The fact is, Twitter isn't the ultimate expression of political discourse and thought-it's mostly just shitposting, gossip and talking about things you like and dislike. Kinda like how there were people who thought Tumblr was a haven for "SJWs" when in reality that was probably just 8% of it-the place was mostly just fandom interests and porn. To think Twitter is or should be more is delusional IMO. There's plenty of people there, but most of them don't take it very seriously.