Beards are apparently a part of Heathen and Norse Pagan religion, so claiming the religion allowed them to grow and maintain a full beard as a religious exemption. That's since gone away with Hegseth's purge of almost all non-Abrahamic religions.
Everyone knew it was a loophole being exploited and not a bunch of people having spiritual awakenings all of a sudden. But a loophole is much more preferable to a Christian Nationalist leader determining what is and isn't a valid religion.