Seems Dems want the seat to go to the GOP nominee.

No more so than the "Uncommitted" folks wanted Trump to win the election. They withheld their endorsement of Harris because they wanted her to move towards their position on Gaza. The folks you mention are withholding their endorsement of El-Sayed because they want him to move more towards their position on Piker (or on welcoming Jews in the party).

The effect is to make it harder for the party's nominee to win if they don't change their position, but their goal is to get the nominee to make changes and then go on to win the election. I imagine that those concerned about El-Sayed rationalize it in a similar way - the nominee is alienating a minority but important group within the party which cares deeply about an issue, at the risk of losing their votes in the general, so it would actually benefit the nominee to give them what they're demanding rather than refuse to agree/meet/change their position.