This was floated last year also, and also failed spectacularly. Basically more of Boogie's pandering.
Bibi's pulled the program. Probably not out of genuine tolerance, however; Israel may be kicked out of FIFA soon for their system of apartheid, and launching something so explicitly oppressive and racist as segregated buses at this time (when the FIFA commissioner is visiting the country) won't bode well for their soccer team.
Pretty sure Bibi doesn't care about FIFA. If he cares about anything, he knows that it would take just one member of his coalition with a shred of decency to bring the whole thing down. His right flank doesn't quite pose the same threat.
I agree though, it isn't about tolerance.