The law was in place as a last resort to help cities avoid bankruptcy. Several cities in Michigan had been through receivership before that law was passed so a city manager wasn't a new concept, the law just allowed the Governor to appoint one instead of the city having one appointed by a judge.
The real problem was that Detroit is bankrupt and the Governor was ready to appoint a manager. The politicians in Detroit are so corrupt and have been ripping the city off for so long that they didn't want a manager in revealing the filth that's been covered up for years. The unions banded together with the poor blacks in the city who feel like the "white man" is trying to take "their" city over and the law was overturned.
Too bad for Detroit because all the Governor will do now is probably refuse to sign off on any more loans to Detroit and Detroit will finally go bankrupt in complete and the courts will appoint a manager who will then oversee the liquidation off assets and the judge will void the union contracts anyway.
So yeah, that horrible law that you call Draconian that gave broke cities a final chance to avoid bankruptcy was overturned. Hooray for Detroit!