NHRA's problem with this seems to be that it's' a top fuel car. All the other ride along dragsters I could find with a quick search were 9 second top dragster style cars.
Larry says "NHRA officials “expressed enthusiasm for this idea,” when he first talked to them. Those officials then probably talked to the corporate legal team about what Larry was proposing. It's my guess the legal team's heads immediately exploded. "No #$%&ing way!!! You don't want any part of this! If someone gets hurt or killed, even if it's not at an NHRA event, we'll get our butts sued! And they will probably win! You gotta shut this whole thing down! You need to kill it for good!"
Hence:
“As you were told by NHRA officials on multiple occasions, NHRA has not and will not approve a two-seat top fuel dragster for a variety of reasons,” the notice stated. “The two-seat top fuel dragster concept presents serious safety concerns that have not been satisfied and that we do not believe can be satisfied.”
Also:
In the NHRA’s April 2018 decision on Dixon’s appeal, the organization stated Dixon “could not compete in NHRA as a driver or team owner unless he would ‘ensure’ that the two-seater dragster would not be operated anywhere in the world, with it being ‘the committee’s strong recommendation’ that he ‘dismantle’ the car,” according to the complaint.
It's obvious, the NHRA simply want this car and concept to completely "go away." Period.
It's also obvious that Larry has decided that the two seater is part of his package. If he can't bring the car to NHRA tracks, even if to just show it, then it's a non-starter. As far as he's concerned, if the car is banned, then in effect, he is "banned."