Besides the blatant antisemitism common with Muslim countries, check out the ramifications:
The decision comes a week after the country’s prime minister banned Israeli swimmers from participating in a qualifying event for the 2020 Tokyo Paralympic Games.
By not allowing the Israelis to participate in the qualifying events, they cannot participate in the actual Tokyo games.
Malaysia is a known supporter of Palestine, and even prevents Israeli passport holders from entering the country.
https://www.oann.com/malaysia-announces-it-will-no-longer-host-any-future-events-with-israel/