There is freedom in open source, but it certainly does not permit people to do whatever they want. People and organizations working in open source still need to abide by applicable laws, which in many cases does require proving or justifying things.
No need to be sad, I think you are overreacting. This “news” sounds like little more than some paperwork needed to be straightened out so the team can show they are in compliance with the law. It does not seem like a significant event like you have suggested; rather, more of a tempest in a teacup.
I agree there is not much to discuss here without the political aspect of this news becoming the focus of the conversation, so I will get this one closed down.