EOs aren't law though. They're guidance for the rest of the executive branch on how to execute the laws written by congress.
The Legislative branch (Congress) not the Executive branch (White House) can preempt states.
I don't know if you've heard, but norms don't matter anymore.
That's the whole point. They aren't law, and they were (probably) never meant to be so far-reaching, and yet the clear purpose of this Executive Order is to tell the states what laws they can enact. The EO doesn't have the legal power to do that directly, but it clearly outlines the intention to withdraw federal funding from states that refuse to toe the line.