He's saying just because you set up an ATM in the middle of a city and say, and then say feel free to wash your illegal cash here to do some money laundering.
The act of it being on blockchain and "decentralized" wont make a difference, anyone offering said "launder ATM" could be convicted of a crime.
SCOTUS has consistently required an extremely high bar to regulating speech, so it's simply not enough to say "well we regulate this other non-speech thing, what's the difference".
Executing code isn't free speech. The code may be. The execution not so much.
If you want to make the argument that the persons executing the code are liable, than it should be the Ethereum network nodes, not the developer who deployed the smart contract. As it stands, it's pretty unlikely that the Treasury department has the political capital or the operational reach to shut down Ethereum. And that's why blockchain is different.
Trying to find a loophole in the law by trickery is why we use human courts - the judge can still find you guilty and punish the living crap out of you for abetting money laundering.
They haven't though. Tornado Cash is still happily running. If you post your address here, some kind soul might even send you some ETH via Tornado Cash right now. They have asked regulated financial institutions to not receive ETH that came directly from Tornado Cash. That's it; that's all that they can do. While that puts a damper on people converting directly between ETH and USD at such institutions, it does bugger all for people conducting small/informal transactions