How might it be inappropriate to prohibit all proprietary trading while a firm is in possession of material nonpublic information?

In the Level 1 Curriculum, it says it may be inappropriate because it “may send a signal to the market”. I mean if a firm suddenly stops trading, the only signal I might think it sends to the market is that “this firm must have material nonpublic information”. But how is that a signal for anything? It’s totally neutral.