The short answer? Very, very, very stupid.
Democracy includes the freedom of expression and freedom of the press. According to the proposed law, indicating "Naqbe Day" will be a criminal offence. Israel has never really been a true democracy according to accepted international standards, but the current government are showing their true and very ugly face.
The law proposal is supported by the minister of justice, Yacov Ne'eman as well as by the minister of education, Gideon Sa'ar. When similar racist law proposals were suggested a few years ago, they would be judged as racist and non-democratic by the knesset's legal councellor and find their way to their proper place, the nearest garbage can.
I don't think we can ever create a true peace with the Palestinians, if we do not recognize their catastrophe, when the majority of them became refugees and lost almost all they had. By making the very mentioning of the Naqbe an offence, we are creating yet more distance from a true peace agreement. And it is not the politicians who will be paying the price.
All of us will do so. Everybody's blood is red.