Mega parasites already killed off most of the free internet as is. This is is just the last nail in that coffin.
My tin foil self also views this as a direct assault against decentralization.
In the near future it will be impossible to legally run a fedi services under any westoid regime that will pass these clown laws.
I am guessing buying service space in non westoid regime jurisdiction would still be viable but it will a huge cooling effect on the platform anyway. Just gonna be a bunch of radicals and feds shit talking each other.