You are correct that the criteria for the grants was met. The problem is that the criteria themselves were illegal under federal civil rights laws. Some grants were restricted to minorities, which is flagrantly illegal; other grants explicitly favored minorities, or had DEI components that did—perhaps less flagrant, but illegal nonetheless. As
Efimov et al. (2024) meticulously documented, the Biden administration via executive orders (see links in Efimov to EO 13985, EO 14091) required all federal grants to explicitly further DEI. This put grant applicants in a difficult situation, namely, that in order to get funding they had to promise to violate federal civil rights law. So, these grants, which are essentially contracts, were illegal in whole or in part. Illegal contracts are legally void and unenforcible. So what do you do with an illegal contract? Uphold the law by canceling it or continue to violate the law by honoring it?
Unfortunately, Johnny and Herc don't know what they are talking about.