Yes, it may well be that they have once again released an unfinished, flawed feature far too early.
I'm not saying that it's necessarily due to the possibly unintended transparency regarding right-wing extremist accounts. It's just that it apparently led to some accounts being visible as being maintained from abroad, even though they insist so much on "America first" and so on. I just wanted to point out that it's a strange coincidence that this feature was immediately withdrawn as soon as this apparently became visible to the users.
Of course, there may be other reasons for rolling back this feature, but with Musk, I wouldn't be surprised if he did it with regards to his political allies, since he clearly has an agenda that aligns with this kind of ideology (astroturfing or not).
I can't judge this myself because I stay as far away from xitter as possible. So I only know what I've seen in the media reports – and I don't think there's much reliable information out there.
So yes, it's speculation, but it doesn't seem impossible at all that the situation is as described in the post. I just wanted to back this up with some other sources that aren't xitter.