Is this a US thing I'm too French to understand?
I'd say likely yes to this. It's much easier to centrally govern a more geographically dense and homogeneous country.
In the US we have strong localized government (city/county, state) and the more sweeping Federal government.
And they do submit to central government, that's exactly what the discussion in this article is about- will the central court decide to strike down their local laws?
If they were able to meet the actual up/down metrics for the subsidy, I don't see why they shouldn't get it. But they weren't able to do that, so they don't get the subsidy.