This verse focuses on the legitimacy of the reading and the consequences of rejection. The context before this has been addressing Jews and Christians.
Surah 2:121:
"Those unto whom We have given the Scripture, who read it with the right reading, those believe in it. And whoso disbelieveth in it, those are they who are the losers."
The phrase haqqa tilawatihi ("true recitation") is the focal point.
You cannot have a "true reading" of a "false book." If the Torah and Gospel were already corrupted, any recitation of them would be a recitation of error.
By acknowledging a "right reading," the Quran admits that the text being read—the Bible in the hands of the 7th-century community—is the pure and unadulterated Word of God. If the text was pure then, and we have that same text now, the Quran's contradictions of that text prove the Quran is not from the same source.
The verse states that those who read the Scripture rightly "believe in it."
If a 7th-century Christian reads the Gospel "rightly," he will find the deity of Christ, the Crucifixion, and the Resurrection. If he "believes in it," he is doing exactly what the Quran says a righteous person does.
If the Christian believes the Gospel, he must reject the Quran (which denies the Cross). If he accepts the Quran, he must disbelieve the Gospel he just read "rightly." This makes the Quranic command self-negating.
The second half of the verse warns that whoever disbelieves in the Scripture (Al-Kitab) is among the "losers."
Most modern Muslims are forced to "disbelieve" in the Bible as it exists today, claiming it is unreliable.
According to Surah 2:121, if you disbelieve in the Scripture that was given (the one being read "rightly" in the 7th century), you are a "loser." This puts the Muslim apologist in a position where their only defense against the Bible's contradictions actually condemns them according to their own Book.
This verse says that those who read the Scripture with a 'right reading' believe in it.
If a Christian in the 7th century read his Gospel with a 'right reading,' did he find that Jesus was the Son of God who died for his sins? Yes, because that is what the text says.
If he 'believed in it,' was he one of the 'losers' or a true believer according to this verse? The verse says he is a believer.
If the Quran calls him a believer for believing in a book that says God has a Son, then the Quran is validating 'shirk' (associating partners with God).
If the Quran calls him a believer, but then elsewhere says he is a disbeliever for that same belief, the Quran has contradicted itself. You cannot have a 'right reading' of the Gospel that leads you to Islam."
This verse essentially forces the person to admit that the "Right Reading" of the Bible leads away from Islam, not toward it.