No rejected, just delayed
The law hasn't been rejected, it was just sent back to the working group that wrote it for minor adjustments. They're planning on voting on the adjusted proposal again later today, and it looks like it'll pass that vote.
The changes that are being added is another layer of checks instead of fixing the fundamental problem: instead of just allowing surveillance of those suspected of breaking the law, -everyone- will get snooped on.
Another big change from before is the allowed uses of the surveillance. Before, the goal was to prevent a military invasion (from Soviet, although it wasn't explicitly stated). Now the goal will be to prevent "external threats" in general, and it will be up to FRA to determine what is included in this scope.
One big reason for the law change, according to some, is that it will allow FRA to gather a lot of information from general Internet traffic that is routed through Sweden and pass it on to other countries' intelligence agencies, e.g. CIA. Since a lot of Russian Internet traffic flows through Sweden, we'll be back to when Sweden was USA's spy on Russia's border. It is also assumed that FRA and other Swedish agencies have already made such deals and need the new law to be able to hold their part of the agreement, which would be the reason for the heavy-handed handling from the prime minister.
Finally, it's been observed that this is a system that would make Stasi green with envy. If or when a party like the nazis or the communists come into power, they will have a perfect system for tracking down dissidents already in place and ready for use. How helpful of us. Oh, and speaking of which: surveillance orders given directly by the ministers bypass the checks put into the system to prevent abuse. Not very good checks if they're bypassed, are they?