It's not that, it's the fact it's an acronym that only certain groups are familiar with. Calling it Visual and Performance Arts is fine, because everyone understands what it means. Calling it VAPA is inferior communication, because it only signals to those already familiar with the acronym, and leaves the rest out.
Instead they now just call it the 'Arts Department', so everyone understands what it means.
For example, if you're a first generation parent, new to the US, not very familiar with English, clean toilets for a living, not very familiar with the school system, have no network of people who work in schools or go to certain programs, and are looking for a good program for your child, then it's easier to navigate information on a website, brochure or banner that says 'Arts Department' than 'VAPA'. These parents may be unaware of the program entirely, and not apply.
Whereas if you're white, your parents go to broadway shows and the NY MOMA, your brother-in-law is superintendent of an arts school whose daughter studies at VAPA, you'll be more likely to know what the acronym stands for, and more likely to navigate the same information (websites, banners, brochures) that say VAPA just fine, and apply for the program.
I'm exaggerating the examples a bit, but the common thread is: language is a tool for communication, acronyms can be complicating and obfuscating factors in communication in certain contexts (in others they're fine), such as marketing school programs to children/parents from all backgrounds. And as (unintended!) outcome they can thereby happen to filter out poor/minority backgrounds, leaving white/majority/rich groups, who get access to these programs. That observed outcome benefits white people (which is why the words 'white supremacy' came in, which I think is wrong as it implies intentionality where there isn't one... instead I think it can better be defined as unintended extremely minor white privilege'.)
Losing the acronym is a simple and potentially useful and also extremely minor step to take, that got dragged into the spotlight as a symbol for anti-'oppression' and anti-'wokeness' from both sides respectively.