The restriction exists to wash their hands of legal complexities of dealing with those countries’ AI laws.

Same situation as websites that blocked EU visitors when the GDPR first came out and everyone was still trying to interpret the rules. There were ambiguities in the GDPR that made it risky to operate in those countries so the easy solution was to opt out.

I doubt they care what you do with the model in those regions. It’s an escape clause to show they don’t encourage it if some regulator gets itchy trigger fingers and tries to go after them.