Having polities to look at promoting regional diversity, equity between regions, and making sure all regions are included, instead of only one axis of "merit", in awarding research funds, is literally DEI.

So it's not that the administration wants them to only look at merit and nothing else, which I thought was the the explanation, but that they think some non-merit things are okay to balance for and try to encourage diveristy, equity, and inclusion on the axis of, and others aren't.