While I see how a law like that would create insecurities in the FOSS world I trust that it will not be abused to shut down FOSS projects as some of the largest EU members like France and Germany are relying heavily on Open Source software. I believe this do be the reason why this cumbersome exception was formulated in the first place.

However it could mean that the blurry line between commercial software and FOSS software could become a clear cut and FOSS projects that provide paid versions of their software could be forced to comply or go back to relying on donations.

tldr: I dont think it will kill FOSS per se. Potentially it will become more difficult to mometize FOSS apart from donations.