Tohoku Electric to scrap aging reactor at Onagawa nuclear plant

Sounds like a good call

After 7 years they are finally building a sea wall in a NPP on a major faultline and with a long history of tsunamis?

And why one reactor can’t pass safety rules but the other two can?

Good good, after 30 years they have made a load of money now close it down and dont be greedy, others should learn from this. On a side note interesting/worrying that mitsubishi are working to make "small" reactors for localised use.

And why one reactor can’t pass safety rules but the other two can?

This is explained in the article.

Unit 1 is a different size and design than the other two. Being smaller it obviously produces less power and thus less income. The lower income means longer to recover the cost of upgrading. Also the space to install the upgrades is not available, meaning it would require substantial rebuilding/redesign at even more cost. Combined with its age and it isn't economical to upgrade Unit 1.

Meanwhile Unit 2 is 10 years newer, meaning 10 additional years before reaching 40 and a new safety review. Plus it is larger and thus produces more power and income. And although not stated in the article it would appear the upgrades wont require substantial rebuilding/redesign.

Lastly, Unit 3 is the same size as Unit 2 and 17 years newer than Unit 1 making the economics even better than Unit 2.

On a side note interesting/worrying that mitsubishi are working to make "small" reactors for localised use.

What is worrying about this?

And work on small modular reactors isn't new. It has been going on for decades.