My memory is hazy at this point, but my recollection of the original grievance was that there was a (funded?) Palantir employee on the Rust team at the same time that they decided to put out a message in support of racial justice. The former certainly doesn't help the message of the latter, and people were (in my book, understandably) upset at the dichotomy.

My own work is partially funded with defense money, because the DoD funds everything. I'm not so happy with that, but I do think that working at Palantir requires several additional steps of introspective moral failure than merely receiving DoD money does.