On the surface this looks like a setback for the uprising, but it is not. How many Revolutionary Guards are loyal to Fazli, or share his view?
Every time the Theocracy takes an action like this, they alienate more people and deepen the cracks in their regime.
It might have been that Fazli was a decent human being, or it might have been that Fazli realized that killings provoke long-term desires for revenge, and that somebody who blamed him might find an opportunity someday to kill him.
In any event, his removal is a big deal. One thing you have to understand about such societies, is how much depends on personal connections. Fazli probably had lots of friends and relatives dependent upon his position. The Guard has lots of economic interests, with their people owning lots of businesses. There's a lot of wealth and power involved.
All of Fazli's associates will now be out in the cold, as Fazli is replaced by somebody more "reliable". This will snowball.