My personal take is that the administration has had no problems taking over digital/physical infrastructure in undemocratic and authoritarian ways. And, the fact that this "design studio" is creating staging sites for some of the most sensitive government services like voter information and passports is ominous even when we don't know exactly what the contents are of their redesigns. If you take a straight reading of the executive order there are 1,000 other websites that they could start their work on that are far far worse to use than https://vote.gov and https://usa.gov/passport.
Fascinating to read about the laws created to prevent this. Laws that certainly didn't anticipate corralling tech in this way. You could probably assume ignorance of these laws was the root of the failure to comply, but then you would also have to assume Gebbia doesn't understand the tech. And, those two things, as the author of the article says, most certainly aren't both true at once.