Based on all I know about Deemed Exports wrt software and current US controls on software Deemed Exports, your read is spot on.

The phrasing of the foreign nationals implies a Deemed Export control, which is already in place for software for stuff like drones or space satcomms.

If it's a Deemed Export control, it's a strategic position and not a knee jerk reaction about cybersecurity threats.

It's a coherent read too; if Fable can solve coding and build biological weapons (X to doubt) - well then terminal guidance and autonomous drone controls should be a piece of cake for it and that software is already under Deemed Export restrictions.

It’s not because of course it’s all vibed (what’s the criteria?) and we know it doesn’t work

https://www.bbc.com/news/stories-54695598

As it stands there is no way to comply days before IPO and no effective remedy.