So, the response is here. Without a closer look I can't say what's really going on - although I lean toward believing that Core is going in the right direction - but there still seem to be some orange flags.
Unfortunate. I'll wait some days for the response, but it better be a good one.
This behavior from Core may be par for the course, but I can already buy watches from companies that have values only for marketing. It's a small niche, and being nice would not cost much.
And they already died once, without having a proper off-ramp for their users - for now I don't trust them to exist in another two years. (I'm not really sure they even are in this for the long term - talk is cheap.)
I once had a colleague from Iran. Working (legally) in the middle of the EU. He was already blocked from using credit cards, but thanks to not-100%-US-dominance still allowed to use local banks. For such local banking he will likely need to have Play services.
It's not countries that are affected, but people. And people sometimes move.
The hobby repair shop can only be liable for a very small number of bikes, those they worked on. You cannot restrict the number of users of free source software, and you cannot restrict the user's risk profile. Like "good enough for an offline arcade game, but nothing else". Analogies have their limits.
But yes, lawmakers will decide, and given that they for instance try to de facto prohibit aftermarket OpenWRT installs, I have a guess how they would decide.