The headline is clickbait. Microsoft is saying why they couldn’t secure the kernel against such an attack, and are right in saying that the EU prevents them from closing it off to third parties.

They are not saying the EU is the root cause of the failure, just that they cannot close the hole currently due to the EU.

What they leave out is that they could choose to integrate Defender into the OS for free, thereby removing it as a product to compete against. They could also move Defender to not require kernel hooks either. Neither are options they want to consider currently.