It's humiliating because printing out code (or more commonly "printing out emails") is literally a meme, and I have read multiple articles alleging that after printing, the employees were instructed to shred the papers, without anyone having looked at them. That sounds a lot like Musk trolling by demanding his underlings print their code.
I think the implication was that they asked everyone to print the code out and then, realizing that nobody actually would be able to evaluate the code, asked everyone to shred the printouts lest they go into a dumpster where the code could be stolen.