In an authoritarian state, any spontaneous popular movement is dangerous to the leadership, even if it aligns with their nominal aims (maybe especially then). The CCP has been "Communist" in name only for a long time, but Deng Xiaopings market reforms were probably the most obvious breaking point. It's not unsurprising that students who had been taught about the inevitable victory of Communism would protest against this change of course, especially given the surrounding economic instability.
Although Communism and Democracy are frequently seen as opposites in the West, Chinese propaganda doesn't hesitate to claim Democracy for themselves (there are elections after all) and volunteering in various state-adjacent organizations is encouraged. From the point of view of an upstanding party member, organizing a student rally probably seemed like the right thing to do, in good old revolutionary tradition.
