Explain to me like I'm 5 why it matters if a coin is a security

It seems lately all I see in this sub is news relating to the SEC calling coins X, Y and Z securities and everyone losing their shit about it. I will admit I don't understand what all that really means. So I googled it and found this answer:

Why does it matter if crypto is a security or commodity?

If cryptocurrency is defined as a security, it falls under the jurisdiction of the SEC, and is subject to rules on price transparency, greater reporting demands, and market abuse oversight. Arguably this offers investors more protection, however, it can limit the freedom of the market.

Okay so please explain to me in simple words why this makes people panic and prices to dump because I legitimately don't see what's the big deal?

"Limit the freedom of the market" So less scams and shitshows like FTX and Celsius?

As I understand stocks are also securities but I don't ever see any stock investors complain about that. Maybe I'm an idiot but isn't the crypto scene overreacting a little bit?