This is the future; partially fuelled by malware, partially fuelled by the desire for platform control, and partially fuelled by government regulation.
This regulation of NSW, Australia considers rooted devices with extra non-Google/non-Apple approved security features such as a duress/wipe PIN (a standard feature of GrapheneOS[2]) as a "dedicated encrypted criminal communication device". How the device is being used doesn't matter. It's how it _could_ be used.
[1] https://classic.austlii.edu.au/au/legis/nsw/consol_act/ca190...
It is always the human mind that dictates the action, not the tool. It is futile to try and ban the tool, and I bet 100% they knew that.