The Israeli Regulation Law, a law to appropriate land owned by Palestinians for usage of Israeli west bank settlements, was given many different interpretations, which in turn encouraged a lot of misconceptions. How is this bill different than what you've read, and what future circumstances can it lead to?
Well for one, this law refers exclusively to construction that was started before the passing of the bill, and says nothing of future construction. Another thing is that it refers to structures built in "good faith" or endorsed somehow by the state. A potential issue the Israeli government might encounter is how do you establish "good faith", meaning how to separate "land bandits" from the "misinformed". Another part of the law says that the land would be appropriated only if what was already built is considerably of more value than the land itself, referring to it as a judgement of proportionality between destroying and preserving.
This type of law exists in many democracies such as USA, Canada, France, and UK, called "Eminent Domain", which grants the state the right to appropriate (the name US lawmakers gave it) private property for other usage, with proper compensation.
A key part of the Israeli Regulation law is that it does not make the state the owner of the land, but rather grants it usage and possession rights, leaving the original owner his land, with compensation of 125% of the value of usage, or a choice of another plot. Another significant part is that the law stipulates that it would cease to apply if there is a change of a national nature to the land that would contradict it, meaning if either side, Palestinian or Israeli, annexes the territory.
The main question here in my opinion, which the Israeli supreme court would have to answer, is whether or not the Israeli law can be applied to Judea and Samaria (the West Bank), as it was never annexed by Israel. Another part of the same question would be whether or not this Israeli law can be applied on Palestinians, owners of said land, despite the fact that they are not Israeli citizens. A yes on both accounts would mean much greater repercussion.
Many assume that this law would be thrown out by the Israeli supreme court. But on the event the court says the law is legal on both accounts mentioned above, this would then potentially entail further advancement in granting Palestinians a legal standing at the Israeli judiciary system, and the ability to sue the state for their civil rights, according to Israeli law. A potential way for the Israeli government then to thwart that would be to annex area C only, 60% of the west bank, and to apply Israeli law only on its residence, the settler community, about 400K Israeli Jews, and over 90K Palestinians.
In conclusion, the main question this bill raises is not what would happen to the Palestinian land on which 2000 houses were built or to the houses themselves, but rather something much greater than that, much more "big picture". The question here is whether or not Israel is applying Israeli law on area C, on its way to annexing it, much like Minister Bennett has been pushing for, unilaterally establishing the borders of the Palestinian state, and its own.