While the motives may be noble (regulating surveillance) it might happen that models like Stable Diffusion will get caught in the regulatory crossfire to a point where using the original models becomes illegal and new models will get castrated until they are useless. Further this might make it impossible to train open source models (maybe even LoRAs) by individuals or smaller startups. Adobe and the large corporations would rule the market.
“To boost AI innovation and support SMEs, MEPs added exemptions for research activities and AI components provided under open-source licenses. The new law promotes so-called regulatory sandboxes, or real-life environments, established by public authorities to test AI before it is deployed.”