Parent is saying that California may not have the legal authority to regulate the internet in that way, since some powers are given only to the federal government.
Whether they do or do not have the authority isn't something that can be answered by anything but speculation until it's been tested in court, and I don't think any of the ISPs had enough to gain through packet prioritization that it was worth the risk of going to court.
"Ninth Circuit ruled unanimously in January 2022 that California's net neutrality law may continue to be enforced and cannot be overridden by the FCC as, current as of the decision, Internet services were classified as information services."
There's still one more higher court that can overturn that decision - SCOTUS. They could conceivably rule that no government agency, state or federal, has the ability to enforce such regulations.
That there was a hail mary appeal to the Supreme Court possible that they elected not to pursue does not negate that the issue is clearly not that the broadband ISPs didn’t see “enough to gain through packet prioritization that it was worth the risk of going to court”.
That's fair. SCOTUS is a roll of the dice lately, and there's no way of telling what crazy rulings they might back. As far as I know, though, that ruling hasn't been appealed.