There are several reasons why this is happening.
From the Australian view
The French were massively behind on the submarine program even before COVID hit, and buying new military equipmemt is not just about improving capability. All equipment has a finite practical lifespan, and Australia's submarine fleet is reaching that point - before too many more. years have passed, the Aussies will have no subs unless the replacements show up.
The conventionally-powered versions of French nuke boats were not the best fit for Australia to begin with. The primary operations area for any foreseeable conflict is going to be up near China and Japan, which is a long, long way from RAN ports. Conventionally powered boats have pretty harsh range limits, making it very hard to carry out that ops area. Nuclear submarines have unlimited range.
From the American view, this builds up an ally in the region, either bolstering the US presence or possibly negating the need for it. In both cases this reduces how much the US has to commit to the region. Equally important, the proposed submarine base. at Perth for servicing the new boats would inherently be able to service and repair US nuclear boats, which is of immense value in and of itself. If the Australians were not pushing to have the boats built domestically, the basing alone would be enough to justify selling the next few *Virginia*-class boats off the production lines.