Yet funnier: the headline is ambiguous at the grammatical level, but the meaning is not ambiguous! In both interpretations, you have the exact same situation of people flying drones illegally while drunk in japan.
Alternative interpretation: The government of Japan was collectively drunk and completely outlawed the flying of drones
True, a correct interpretation, but so preposterous it can be ruled out. :-)
Cute, but not really. In one situation, we have people illegally flying drones drunk. It may have been illegal since forever, and people recently started doing it. In the other situation, the government recently passed a law - but that doesn't necessarily mean that anyone is breaking it.
Alternatively, all flying drones have been outlawed in Japan and the country has run out of saki.
Wouldn't it be Japanese outlaws in case of noun? CMIW.
Yes, Japanese is an adjective that would modify "outlaws" while Japan is a proper noun itself.