They removed pride merchandise to try and appease their more extremist and fascist market segment.
They were also one of the early companies to cave on dropping DEI programs.
To be fair, we were also mad at Target for capitalizing on pride month with shitty rainbow washed baubles of capitalism made by children in developing countries in appalling conditions for appalling wages.
Or it just wasn't selling well enough and the space was better taken by things that sell better. I don't believe I have ever bought a piece of pride merch at Target...