What changes now that the U.S. softened its position on Israeli settlements?

Well, I mean, not a lot. I mean, keep in mind that this is also the administration that moved the embassy to Jerusalem, from Tel Aviv. Everyone said that was going to be a massive problem. Ultimately, not many people cared. Same thing with recognition of Golan Heights for Israel. This is just one more give from the Americans to the Israelis in the context of a region that doesn't care as much as they used to about Israel - Palestine.