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I assume that independent agencies would primarily look to judicial precedents for guidance on interpreting the law, so the order is stripping the judicial system’s influence even if it’s not stripping its explicit authority.
Federal Agencies make their own rules. That is how the Federal government works. Congress makes a law, usually with enough ambiguity that the federal agency charged with enforcing the law has to make specific interpretations. They make those interpretations, usually under some process that requires public notice and comment, and that interpretation becomes the law in effect. That interpretation can be challenged through a lawsuit, at which point a Judge could overrule the interpretation establishing a new interpretation through judicial review. Until recently, the courts gave a lot of deference to the agency's rule making process because rules are usually written by a combination of lawyers at the agency, and subject matter experts. So, for example if a new law regulating factory safety was passed, and the enforcement of the law was delegated to OSHA, then OSHA lawyers and subject matter experts (like doctors or engineers working for the agency) would make a rule and solicit public comment.
Nothing about this EO can, or pretends to. usurp the power of the judicial system. The AG can make any interpretation they like, it can still be challenged in a Court. And after the Chevron court case, these rulings are easier than ever to challenge.