Pasek and Paul won this same category (Best Original Song) in last year's Oscars for a song from La La Land. I doubt Oscars wanted to give them back to back Oscars so soon unless their song blew the competition way. Looks like it did not.
Only for serving as lyricists. They shared the award with its composer, Justin Hurwitz, who also won for Score. Why would "Oscars" care if they won back to back years or not for Song? I don't know why they'd prevent someone from winning for being fairly new to the Oscar game, but already having a Tony under their collective belt. I'm not convinced every voter is saying, "They got an Oscar last year for lyrics, so it doesn't matter how good the song is, we can't give them another this year. It's all about the timing. One Oscar if you're new, but there has to be at least a year gap..." I mean, how do you imagine this unspoken rule plays out that doesn't sound completely silly?
"What can you expect from a bunch of seitan worshippers?" - Reginald Tresilian