Senior Principal Magistrate Theresa Nyangena granted the legislator bail as he faced a charge of offensive conduct conducive to a breach of the peace under Section 94(1) of the Penal Code.
However, Kaguchia did not take a plea after his defence team challenged the charges, arguing that the Directorate of Public Prosecutions (DPP) had not properly framed them.
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The lawyers urged the court to first determine the validity of the charge sheet before plea-taking could proceed.
The court agreed to postpone the hearing of the defence's objection to Wednesday, August 5, when it will determine whether the case can proceed as presented by the prosecution.
Kaguchia's arrest followed controversial remarks that allegedly prompted investigations and sparked political reactions, with some leaders criticizing the prosecution while his supporters maintained the case was politically motivated.
The ruling allows the MP to remain free as the court considers the preliminary objection raised by his legal team.
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The outcome of Wednesday's hearing is expected to determine the next steps in the criminal proceedings.
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