If they're still WFH under L2, they might maybe have a case but they'll still be saving commuting costs.
Yes, don't think it's that common. My commute is $450 per month saving and Level 2 will continue WFH with th odd day in the office. Claiming for the extra spent on heating etc seems morally dubious.
Some companies offer this as a benefit. The ruling is to let them continue doing it - even increasing the allowances - without taxing the employee.
Also the amount of $400 is separate and is for setting up a work environment - desks, chairs and other equipment if needed.