What is it about the money market safeguards that increase volatility?
I don't know much about repo markets, but in dynamic systems in general, two things are likely to generate volatility:


Large shocks of any kind, corrective or not, especially when they are reactive (and therefore delayed and possibly out of phase with underlying cycles - think about pushing a child on a swing while standing at the edge, versus standing in the middle, of the arc).
Reducing the inertial mass of the system.  In this case, reducing the volume of trading.


You have both here. The large shock is the corrective policy (post-2008 actions like TARP), coming potentially years after the initial cause of the financial crisis. The reduced inertial mass can be partly explained by traders reacting to the disconnect between asset values and fundamentals due to actions like TARP, which was mainly about buying up worthless assets to keep banks afloat.