This is because Calabria wants FnF to have followed generally accepted insolvency rules in 2008. That's the apple.
Calabria's resolution of FnF's conservatorships in 2020 or later is the orange.
"Private investors" does not have to mean existing shareholders. In fact, a re-IPO that is to the greatest benefit to the re-IPO investors (assuming they buy common shares) is by definition to the biggest detriment to existing common shareholders.
Taking Calabria's paper to mean that existing FnF common shareholders will do well from this point is a logical fallacy, plain and simple.