Implicitly, this was always, "I'm going to trade X% of Tesla for 100% of Twitter." Then the valuation of both Twitter and Tesla dropped, so to the extent that you think the "value" of a business is wholly determined by its fundamentals, then okay, they're both still the same "value" but now have lower prices.
Except that he hadn't sold the Tesla yet, so he was trading Tesla (at new lower price) for Twitter (at old higher price), and if you previously thought that X% of Tesla was worth Twitter, and Twitter is still worth the same thing, it's now X+Y% of Tesla.
Of course, it's not like the fundamentals of Twitter didn't change. Twitter's revenue comes from advertising, and it's entirely reasonable to believe that it was actually materially affected by the economic downturn, not just in terms of the speculation of the stock, but by how the business functions.
(None of this is to take the position that Musk ought to be able to back out of the deal: if the market had gone even hotter and now Musk could've traded less than X% of Tesla for the agreed upon, now conservative price for Twitter, it's not like the deal would've been renegotiated.)
That's a big if - I think a lot of this stuff is more speculation than any sort of fundamental cash flow valuation. A lot Twitter's actual value (its network effect and influence) is hard to measure anyway.
Some "fundamentals" of a business like twitter's value are:
1. Product/market fit, finances, etc. What you mean by "fundamentals" I think.
2. How easy it is for them to raise money (i.e. the "public sentiment" of VC towards their company and the industry)
3. How likely it is for regulation to stifle their growth, which is a derivative of public sentiment.
4. How much shares can be sold for, i.e. the public sentiment about how much it's worth.
5. Predicted future sentiment of their users and of advertisers, both of which impact expected future revenue.
2-5 all change with public sentiment, and a market crash changes public sentiment of many companies at once.
It's self-evident that elon musk is overpaying more now than before unless you insist that twitter's value is not actually related to 2-5 above, or 2-5 above should have been trivially predictable 100% accurately already as part of its "fundamentals", both of which seem obviously silly.
That's not how business valuations work (it's how speculation works). If Twitter was fairly valued by Elon Musk before the crash then it would be fairly valued now - the fundamentals of the business haven't changed.