Daniel is one of the founders of Mullvad and part owner. He took a big chunk of change from his private wealth and donated it to a horseshoe loonie party. Horseshoe because they try to marry ideas from the extreme left to immigrant hateful ideas from the extreme right. Loonie is self explanatory. His donation made it possible for that party to run a nationwide campaign.
Mullvad users who got mad simplified this to Mullvad fees finance a Nazi party directly. Which isn't true. How much of this donation truly came from VPN fees is also a matter of debate. They aren't strictly Nazis, more xenophobic communists. But assholes are still assholes and people choose labels differently. There is a lot of kneejerk reacting going on.
The company seems to want to ride it out. They correctly point to this being a decision by a private citizen who may exercise his free speech by donating to the loonie party. But they either don't recognize the PR hell of being guilty by association as a company or they know the subscription drain isn't as bad as the online outrage makes it look like. They publicly say this is all about free speech, which is their DNA, yada yada yada.