Imagine half of your userbase, especially almost every single new user onboarded this week, explicitly only wanted to trade on specific symbols, and you don't allow them to do so for 2-3 weeks (ACH settling period) at all.

Well like OP said, then just restrict people whose cash didn't settle yet or require 100% margins like other brokers did.

Even if I believed this excuse, then RH is still greedy for signing up users they don't have the finances to support. They could've closed signups.

Seems better than holding hostage the balances of existing customers who already had cash settled accounts?

This was a lose/lose for them, new signups won’t stick around anyway now and they’re going to absolutely bleed existing users.