Ya so if some kid whose 16 is messing around on his computer figures out some cool app starts publishing it and then bam the incumbents can smack him down.
The regulations are designed to deepen the software moat, and security theater, and I say this as an InfoSec professional.
Yes and regulation will ensure non-commercial activities stay that way. I write open source code because I love building software tools and there aren't a whole lot of opportunities to commercialize my work. I'd love it if an opportunity ever came along one day to get rich building a tool, that I could pounce on, in which case I'd love to know that I wouldn't immediately get jumped and mobbed by regulators.
If the same kid decides to throw a party, train their cooking abilities and everyone ends up on hospital due to some stuff they cooked, they will have lots of fun talking to police officers.