Here's my own understanding:
* Musk didn't really want to buy Twitter. He screwed up and got locked into a contract he couldn't figure out a way out of.
* Having figured that he vastly overpaid, he panicked and tried to cut down the fat. Problem is that he hasn't spent enough time there to figure out where's the fat.
* Musk fundamentally doesn't understand what he has bought. He doesn't understand that Twitter's business relies on pleasing advertisers, who don't give a crap about free speech ideals and are very risk averse.
* Musk doesn't understand that what he bought is far more about people skills than anything else. Managing an online community is an exercise in cat herding. At Twitter's scale you also have to content with thorny legal issues. None of that is fun. Many forces push things into a familiar direction, and "free speech" is a very tough direction to pick.
* Musk doesn't understand even the basics of the platform he bought, like why the blue checkmarks provided any value. He proceeded to immediately throw a huge wrench into that system, to nearly no economic benefit.
* Musk is trying to have his cake and eat it too. On one hand he wants unrestricted free speech, on the other hand he wants to make money from advertisers that don't care for free speech. You can pick one or the other.
* Musk seems not to understand that Twitter isn't SpaceX. There's few places where you can work on a rocket, but a lot of places where you can maintain a backend. You can sell the dream of colonizing Mars to rocket engineers, but Twitter employees can go most anywhere else and do mostly the same thing.
* Musk seems not to understand that since his employees have plentiful options, he can't strong arm them. They can leave. They're generally well paid, and his takeover provides plentiful options for them to organize, help each other and start lawsuits if he breaks any laws.