In the EU it's the other way around.
I could be wrong but I believe that's the general gist of it.
With supplements, the FDA pretty much lets things go until they start causing problems. DMAA was legal for a long time until people started having heart attacks. Melatonin, which is a straight-up hormone, is over-the-counter in the US, and it's by prescription only in Europe.
Now, if you're marketing something as a treatment for a disease, you have to have concrete data to back it up.
So it's very possible to have something that the FDA will let you sell as a supplement (i.e. there's no evidence that it's dangerous), but not make any claims about its efficacy (i.e. you can't say it will treat XYZ).
I experimented with nootropics at one point of my life (found them worthless, FYI), and it was funny how all of the labels just stated what it was, purity, and a blurb about the company selling it. There was no language whatsoever telling you what the supplement was for. Just a giant "PIRACETAM" label on the front.
It's hard to compare the EU to America just like that, especially since the EU is not a state, but you may be right. The EU makes incredibly arbitrary judgements and bans sometimes. Some European countries, however, fare much better when it comes to avoiding such blatant authoritarianism.