Was it ever stated that monks can’t show their psychic powers to lay people?
Perhaps you have confused with this rule from the Bhikkhu Patimokkha:

Should any bhikkhu report (his own) superior human state to an
unordained person, when it is factual, it is to be confessed. -
Pācittiya 8

This rule is more about attainments (e.g. jhana, stream entry etc.) rather than about psychic powers.