A theory: Biden and the DNC do not want to risk a primary process that could result in the nominee being Sanders or AOC, which could happen if Biden announced he was not going to run for reelection. So, he is officially running for reelection (still/ for now) and thus suppressing an open primary. However, if he were to step back from running late, Newsom's actions like this one would position him as a consensus nominee.

A hiccup in this theory is that usually, Harris as VP would be POTUS's successor (and she would be automatically, if anything happened after the convention). Harris could be positioned better as a next CA governor or maybe even VP again. However, the scope of her popularity is not all that high. Newsom and she could make a deal of some sort.