I don't believe there is any official reason but a few reasons with historical significance are possible explanations:

1. Although William held all along that he was the rightful King of England, his ultimate claim to the throne can be considered to be right of conquest. In this way, acknowledging Harold as a former king is appropriate since he was conquered.

2. The idea of divine right to rule was still very important. Kings refrained from mistreating other Kings out of respect to their peers. A king who was vanquished may not have been executed in the same way as a commoner, for example. In this way recognizing Harold as a king took nothing away from William and preserved the concepts of divine right.

3. Harold was dead anyway. Dying at the Battle of Hastings meant that England was without a King either way, and William, as the Conquerer, would be the rightful next King. The inscription you're actually referring to in the tapestry reads "hic Harold Rex Interfectus Est", which literally means "here Harold the King has been killed", so the tapestry acknowledging him as a king who was conquered and died was not particularly inappropriate and it's doubtful William would have protested this.

Lastly, the history of the tapestry is sketchy at best. Its origins remain shrouded in mystery. It was possibly commissioned by Matilda (Queen consort of William), but modern scholars believe it to have been commissioned by Bishop Odo aka Earl of Kent. The purpose of the tapestry is also mysterious. It may have simply been a decoration commissioned, in which case the actual text would not have been of significant consequence. It may also have been commissioned to welcome William to some event or place. It's not even known for sure if the tapestry was completed within William's lifetime or if he ever even laid eyes on it. Its modern significance is not necessarily reflective of how it was regarded between it's creation and when William died in 1087.