Why?
There are college/universities that have been indoctrinating students with Marxist, anti-America and anti Judeo-Christian values for decades. Their students who've learned to embrace and espouse an anti-America, anti-Judeo-Christian world view are celebrated; they are not prevented from graduating. Reprobate faculty and administrations at some of these institutions have allowed for and even participated in the demonization and ostracized of Christian, MAGA and now Jewish students.
What I see in Harvard's decision is selective outrage at a position (pro-Hamas) that offends many Harvard supporters/donors - particularly its multi-millionaire Jewish alumni and donors.
Being a private institution, Harvard has every right to decide who it graduates. However its selective outrage will likely result in many civil suits, which it can cover with its $40 billion endowment.
If they are indeed a private institution, no reason for any taxpayer grants.