My understanding of the FAA position is that they issued a licence for several flights 'of the same type and profile' as IFT4. SpaceX intends to fly a very different profile with IFT5, therefore a new licence is required.
No one has ever done this before, they are literally writing the regs as they go along. The flim flam about waste water from the deluge system and the hot stage ring is a, to parden the pun, a drop in the ocean. All this silly talk about Biden holding up SpaceX because of Musk's political alignment with Trump is just conspiracy nonsense.