Due to YC's large batch sizes and the consolidation of industries such as AI, increasing numbers of YC startups are now directly competing with each other.
This makes more sense now that I think about it.
A legal wrapper will use domain specific legal expertise to structure and develop their product and functionality. It will likely have many functions that are specifically optimized for the legal use case.
If a wrapper can easily move across many domains, then the wrapper likely adds little value to the base model.