The explanation is literally the sentence after you stopped quoting.

The Delaney Clause, enacted in 1960 as part of the Color Additives Amendment to the FD&C Act, prohibits FDA authorization of a food additive or color additive if it has been found to induce cancer in humans or animals.

They’re prohibited from authorizing it as per the Delaney Clause because it causes cancer in rats. The FDA doesn’t get to make decisions unilaterally, they have to follow guidelines. Because their guidelines say that color additives can’t be authorized if they induce cancer in animals, they can no longer authorize the additive.