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"it is that in practice there is probably going to be a soft ban on this sort of space"

I looked around in my area, and the is not a soft ban on this sort of space. No need to guess about probabilities. How about in the country where you live? No need to guess; what's the reality?

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Soft bans are harder to determine than actual written law. With law you can say "This kind of place doesn't exist because the law says no". With a soft ban you are disincentivized in some other way, for example the thread of civil litigation or being harassed by law enforcement on a regular basis.

The US for example is a litigious culture and just having to deal with suits is expensive and can prevent a lot of things that would otherwise occur in other cultures. For example injuries occurring on a property.

What happened to Tornado Cash, Session, GrapheneOS and others is a soft ban on creating privacy tools.

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