Does it mean that russian/iranian web-sites using letsencrypt stop working and need to change their certificate provider?

Depends on whether LE is compelled to terminate service to BGP AS numbers hosted in U.S.-sanctioned countries, and whether LE continues operating out of the U.S..

Depending on how you are supposed to read "You agree to use Let’s Encrypt Certificates and any services provided by or on behalf of ISRG in compliance with applicable U.S. export control and sanctions laws and regulations." it could mean that you are not even allowed to use LE certificate to provide services to sanctioned entities as a random non-US company/person.

I hope not. We don't have any alternatives yet.

They already revoced certificates for some russian sites