If correct, this is a good thing on a generally bad, overstuffed bill. Immediate expensing never should have been changed in the first place, and it was always weird seeing people twist themselves in knots defending it.
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The recent (-ly undone) change went against decades of how things were, was crippling for medium size cashflow-positive startups, effectively increased taxes, etc. But it was really just a straightforward application of the general principles that apply to most everything else.
The point is that building a piece of software that is going to be in use for several+ years is creating an asset. It just goes against our intuition since this industry is so driven by fast fashion, and the bookkeeping of specific components, their depreciation schedules, early end of life, (etc) seems like needless complexity.
You can expense such time as opex, but it has to be justified, and that's often difficult to do. Did you fix a bug by refactoring some code to avoid the problem? Is that capex or opex? Can you convince the IRS of such?
The old (and now new) rules eliminated this accounting game and uncertainty.
For example if you pay someone to fix a leaky roof and they replace a section of a given size, can you call it a repair/maintenance expense or should you be depreciating it as an improvement to the building? Can you convince the IRS of such? The only reason this has more straightforward answers is that accountants have been answering this question longer.
The error was in reconciling them by getting rid of it for software R&D instead of allowing other business expenses to be deducted when they're paid for as well.
For large stable incumbents that have the same expenses every year, the difference doesn't matter except in the first years after you make the change, because it doesn't matter if you deduct all of this year's expense this year or 5% of each of the last 20 years' expenses this year, they add up to the same deduction every year.
Where it matters is for new challengers, because they don't have arbitrarily many years worth of legacy expenses to deduct, so their deduction in their first year will be less than their incumbent competitor's.
It also creates a disincentive (or competitive disadvantage) to increase long-term investments. If some existing company had been making a $5M investment every year but is now facing new foreign competition and needs to increase it to $10M in order to stay competitive, they're in the same position as the upstart. Moreover, then they may not be able to do it, because they were going to have to run lean and divert the $5M profit they usually make to increasing their capital investments, but then the government is expecting tax on most of that $5M which means they can't spend it this year it even though it's ultimately a deduction.
Notice what this does specifically in the case of real estate: If rents start going up the normal incentive is to build new housing, but now you have to put out all the money to build a new building in year 0 and not get to deduct it for decades. Is that the incentive we want? Probably not.