Everyone is applauding this because they hate Trump, but take a step back and see the bigger picture. This could backfire in serious ways, and it plays to Trump's base's narrative that the mainstream media and tech giants are colluding to silence conservatives (and maybe there could even be some truth to that.) I know the Valley is an echo chamber, so obviously no one is going to ever realize this.
Twitter can clearly not fact-check every single tweet on its platform. But what if they did it for every tweet (maybe from a verified account) that X people report for being untruthful? Trump would look bad even if Twitter held everyone to the same standard, and the blue checkmark would come with some responsibility not to lie, so why not?