Discrediting A Rabbi - For Zion and For Jerusalem

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The Talmud in tractate Brachot page 63 relates the following incident.
(I am using for the most part the Soncino translation)

R. Safra said: R. Abbahu used to relate that when Hananiah the son of R. Joshua's brother went down to the Diaspora, he began to intercalate the years and fix new moons outside Palestine. So they [the Beth din] sent after him two scholars, R. Jose b. Kippar and the grandson of R. Zechariah b Kebutal.
When he saw them, he said to them: Why have you come? — They replied: We have come to learn Torah [from you].
He thereupon proclaimed: These men are among the most eminent of the generation. They and their ancestors have ministered in the Sanctuary (as we have learnt: Zechariah b. Kebutal said: Several times I read to him out of the book of Daniel).
Soon they began to declare clean what he declared unclean and to permit what he forbade. Thereupon he proclaimed: These men are worthless, they are good for nothing. They said to him: You have already built and you cannot overthrow, you have made a fence and you cannot break it down.
He said to them: Why do you declare clean when I declare unclean, why do you permit when I forbid?
 They replied: Because you intercalate years and fix new moons outside of Palestine.
He said to them: Did not Akiba son of Joseph intercalate years and fix new moons outside of Palestine?
  They replied: Don't cite R. Akiba, who left not his equal in the Land of Israel.
 He said to them: I also left not my equal in the Land of Israel.
They said to him: The kids which you left behind have become goats with horns, and they have sent us to you, bidding us, ‘Go and tell him in our name. If he listens, well and good; if not, he will be excommunicated.
Tell also our brethren in the Diaspora [not to listen to him]. If they listen to you, well and good; if not, let them go up to the mountain, let Ahia build an altar and let Hananiah play the harp, and let them all become renegades and say that they have no portion in the G-d of Israel’.
Straightway all the people broke out into weeping and cried, Heaven forbid, we have a portion in the G-d of Israel.
Why all this to-do? — Because it says:
"For out of Zion shall go forth the law, and the word of the L-rd from Jerusalem".We can understand that if he declared clean they should declare unclean because this would be more stringent. But how was it possible that they should declare clean what he
declared unclean, seeing that it has been taught: If a Sage has declared unclean, his colleague is not permitted to declare clean? — They thought proper to act thus so that the people should not be drawn after him.

[Kahane-Was-Right BT]

Interesting quote.   Please explain the relevance if you are suggesting any applications of this principle.

Certainly sources like this are part and parcel of the Torath Eretz Yisrael paradigm utilized by Rabbi Bar Hayim.