This seems pretty clear to me as well. I'm fine with criticism when warranted (like the air suspension debacle noted above), but here the feature clearly violates HK law. It can't even be due to a mistranslation, the .gov.hk link presents the statute in English.
Perhaps you can fault Tesla for not lobbying for a change to the law, but you certainly can't fault them for limiting risk by removing the feature immediately. Leaving it in could open them up to fines, lawsuits, and maybe a sales ban.