Kirk here. This issue came up in the spring but recently a final decision has been made. I agree with my colleague at Kumamoto Gakuen University:

— start quote — But Shin Myoung-jik, a professor of South Korean literature at Kumamoto Gakuen University who is knowledgeable about culturally diverse societies, said the deletion sends a negative message because it came about due to exclusionist opinions. “Policies should be implemented that aggressively include (foreigners) as members of society to resolve discrimination and prejudice,” Shin said. — end quote —

https://www.asahi.com/ajw/articles/14966266

Here’s one more article that provides more details:

https://mainichi.jp/english/articles/20230726/p2a/00m/0na/004000c

— start quote — The city’s decision is “very unfortunate, because it deferred to opposition stemming from a misunderstanding,” said Yasuko Iwashita, associate professor of multicultural coexistence at Hiroshima Bunkyo University. “Foreign residents will have a negative impression (of Kumamoto), seeing it as exclusionary. The city should have explained the point of the amendment in a responsible and detailed way.” — end quote —

The article also points out that there are smaller communities that have officially declared foreign residents to be shimin (lit. “people of the city”) but that Kumamoto would have been the largest city to do so.