Because they want to help out those that would be spending it on essential goods. There's a common critique of Yang's proposal that VAT is regressive and will hurt lower income more, but the counter to that is exactly changing the structure of the VAT to balance that out. That and the fact that UBI + VAT yields a strictly improved situation for lower income families (price assumption here).

The "things costing more" part is a potential problem though. But it won't be because everyone is making more money so sellers can automatically jack prices up. It will be based on supply and demand (as always). Demand for essential goods isn't going to suddenly spike because people have more money.