Correct me if I'm wrong but I think this is only for 46 stocks that are to be physically settled.
Nonetheless, I don't think it's good for retail traders; it's just SEBI playing Big Brother to retail investors. Ideally, lot-sizes for F&O should be a lot smaller & margins shouldn't be unnecessarily high since that'd allow small investors to protect themselves by hedging. So, SEBI measures like this & many others are only exposing retails investors to even greater risks & losses.