This regulation ensures that whoever sells the software to the consumer is responsible, and that's the way it should be. The creator of a library doesn't know how his library will be used in the wild, he can't anticipate all possible problems, the product maker can. It is the product maker's responsibility to integrate external components properly, having validated that they are up to standard.
If you're a manufacturer, you can't just pick components at random and then say it's not your fault if your product doesn't work. That's why manufacturers have whole teams of people working to ensure that what they receive from a supplier is up to spec.
1 - This regulation only concerns commercial activity. So you could only sue the company I work for, and only if you've bought their products. Also by definition that excludes my personal projects.
2 - You can only sue for defects (in this legal context it means unsafe to use) or damage (physical or material). You can't sue for simple bugs.
These kinds of liabilities already exist for all the objects in your life and yet you don't spend your time suing people every time something does not work as expected I imagine
If that's true (I have no idea if it is or not) - I'd class it as a bug in the legalisation. Consider a router I've purchased. It has a bug that allows 1000's of them to be corralled into launching a DDOS against someone. The reality is I don't particular care that happened - it didn't effect me. But the person it did effect didn't buy it.