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Why didn't they call it more accurately Supervised Self-Driving which is based on the long term used by them.

The marketing name FSD or Full Self-Driving with (Supervised) in small font and brackets is incredibly misleading.

They didn't because no-one forced them to, and why not oversell your product when no-one is stopping you from doing it?

Regulatory agencies have been toothless towards Tesla for a long time.

Regulatory agencies are always going to be behind for a long time when a new comes along. Regulations still have not caught up to social media. The unfortunate part is that by the time regulations are obviously needed, the company that would be regulated has grown to some massive behemoth with lots of money to spread around the regulators to ensure that regulations come in to not stop them but make it difficult for anyone to follow as a competitor.

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