If the Fed doesn’t buy these bonds, it is going to scare states on what kind of junk bond rates they will bring.
The Fed isn’t in the business of buying municipal bonds. They can incentive others to do so, however — and that is at least as dubious and questionable a practice. The problem is (if you read the article) that there is an implicit fed guarantee and the interest premium is artificial which distorts the market — it effectively bullies or seduces the market to finance risky investments.