As I see it there are two possible reasons for Starmer's 'red line' over any form of FoM between the EU and UK:
He, like the Tories, has decided to ignore that Vote Leave campaigned for a 'soft Brexit' with 'exactly the same benefits'.
He allowing the Tories and Reform to dictate Labour policy because he's fearful of public opinion turning even further against him.
Either way, this is not how a democracy should function, and Starmer is effectively a Tory PM wearing a red rosette.