> My mind is blown that this oddly specific behaviour

It's not oddly specific, it's just plain voyeurism.

> was apparently so common that the government mandated all cellphone cameras must play shutter sounds that cannot be muted. What the hell?

It doesn't have to be common for a law to be put into place. A Similar law exists in Japan as well.

> doesn't this law just push pervs to snap video instead of still shots while unnecessarily degrading user experience across society?

Yes, it's largely political theatre.