Actually, a dose reduction when your A1C is good is pretty much the opposite of a bad sign - it's usually a positive move. Your doctor is likely lowering it because your blood sugar control has improved, not because it's gotten worse. When diabetes management is working well, doctors often try to find the minimum effective dose to reduce medication burden and potential side effects. That's a win, not something to worry about.
There are several reasons this happens. Sometimes your body becomes more insulin-sensitive over time, especially if you've made lifestyle changes like diet or exercise improvements. Other times, weight loss or natural shifts in your metabolism mean you need less medication to maintain the same control. Your doctor probably did the math and figured out that 500mg twice daily will keep your A1C in that good range you've been hitting. They wouldn't reduce it if they thought you'd lose control - they're watching your numbers carefully.
The best thing to do is follow their plan and just monitor how you feel over the next few weeks. Keep an eye on your blood sugar readings if you check them at home, and definitely go to your follow-up appointment as scheduled so they can verify the new dose is still working for you. If you start feeling off or notice your numbers creeping up, contact them right away. But honestly, this kind of dose adjustment is pretty routine when things are going well.