He hasn't hit people for attacking the owner. The exceptions are hate speech, CP, a very large interpretation of what incitement to violence means (in terms of the Antifa hits, many of those are legal but awful) and Alex Jones.
It's not free speech, but it is a guy actually taking a personal stand, which allows us to criticize him for it. He is taking ownership of the problem, a vast improvement.
Also, this has not been a return to the illusion that was. Twitter cannot maintain that without a severe amount of censorship, which Elon will not have. It only worked in the first place because the Cathedral controlled the news, but now in its Bazaar form, such illusions do not hold.