After the announcement, Lisa Bjurwald, chair of Sweden's republican association, told the Expressen newspaper that the decision was "a major victory in the republican battle". "Its definitely worth cracking open a little Pommac or mini-Champagne to celebrate," she said.
Karin Lennmor, the former editor of Svenska Damtidning, Sweden's leading Royal gossip magazine, said that it was wrong to see the decision as a demotion.
"I think it was out of concern for the grandchildren that they did this: now they have the opportunity to grow up in a different way. They can choose their own careers. Madeleine can decide if she wants to have her children in an American school in Florida."
The Royal Court also appeared to be preempting an imminent review of the apanage system, under which the family is to receive 146 million kroner (£11.5) in government funding next year. The British royal family cost the taxpayer £67 million in 2019 through the sovereign grant.
Sweden's Justice Minister Morgan Johansson put out a written statement after the announcement confirming that the government's planned inquiry into the funding.
"It is important that the circle of people who receive 'apanage' be limited and that is the reason why the government is currently putting together an inquiry which will consider the parliament's grant to the court," he said.
The monarchy remains popular in Sweden with a 2017 poll from Gothenberg University's SOM institute showing a clear majority (55 per cent) support it, with Crown Princess Victoria by far the most popular royal.
A 2017 poll for the Expressen newspaper in 2017 found that 57 per cent of respondents believed that she was the best Royal representative for the country, compared to only 19 per cent for the King himself. Victoria's children Estelle, 7, and Oscar, 3, will retain full royal privileges and duties.
Princess Madeleine has in the past struggled with her role, facing criticism for her decision to live overseas with her British-American husband Christopher O'Neill, first in London and now in Miami, Florida.
After the announcement, Madeleine said that the couple was happy for their children Leonore, 5, Nicolas, 4, and Adrienne, 1.
"Chris and I think that it's good that our children will now be better able in the future to lead their own lives as private people," she wrote on Instagram.
Prince Carl Philip and Princess Sofia, meanwhile, said that they were pleased that their children Alexander, 3, and Gabriel, 2, would be "freer" while retaining their titles.
"They will continue to hold their titles as Princes and their Dukedoms of Södermanland and Dalarna, which is something we value and are proud about," they wrote on Instagram.