This might make sense if there weren't shops selling large bottles right after security. Ones full of highly flammable liquids, even.
But yes, that's easily worked around in the manner people brought up already (I did think of duty free bottles, but not camera cases, that is a good one).
Howver if you rely on 10 people to take 100ml each that’s a far larger conspiracy and far less likely than one person taking 1l through.
Gunpowder doused in alcohol is, very famously for people interested in the history of rum, flammable if the alcohol is around 57.1% or higher, but straight alcohol/water without gunpowder is flammable at a lower strength than that.