My understanding from seeing talks this group has given is the culprit was the same effect I mentioned. If the fluid instabilities aren't properly handled, gas flowing onto galaxies stays cold and flows into the centers of galaxies [0], which results in less angular momentum because much of the material is at small radii. Correctly computing the fluid behavior results in gas not plunging directly to the centers of galaxies and instead building up at somewhat larger radii. For a given rotation speed, a larger galaxy will have higher angular momentum, so that's the sense in which their simulation improves on things.
[0] - This behavior has been called "cold flows" or "cold mode accretion" and was seen in simulations, but hasn't had direct observational support.