If all competent employees are equally competent at home but some other slack more at home then WFH is a net negative for the employer. Hence the policy.
Also you're assuming it's possible to control who is slacking / incompetent or not. It's not.. it's a partial information game. Hence the policy.
People should be allowed to do what makes them the most productive, be given feedback and coached if they’re not productive enough and finally let go if that doesn’t work.
That’s how it has always been. There are always many factors affecting one’s performance in person or remote.
It is never possible to control people but you can certainly measure productivity if your management is good.
Also you're assuming it's possible to control who is slacking / incompetent or not. It's not.. it's a partial information game. Hence the policy.