Because every time something new comes along, people will push boundaries while arguing it is acceptable. In this case, they may argue that it is no different from physically furnishing an apartment, taking some photos, then removing the furniture. At least in terms of representing the product. Clearly using AI is much easier and cheaper than physically furnishing the apartment for a couple of hours. Some may even genuinely believe this, seeing it as more a tool of convenience than something that doesn't always represent physical reality.

That doesn't answer the question. If you used photoshop's content-aware fill (introduced over a decade ago) to hide imperfections in your apartment, that would still be deceptive advertising. Moreover it's almost as easy as asking AI to do it, so the "AI makes everything easier" excuse doesn't work either.

I think the reason is clear. Politicians love to enact bills for already illegal things, but tailored for the current thing. In this case, it's AI, which there's bipartisan opposition. It makes them look responsive to their constituents and requires no political capital, because it's uncontroversial.

The whole point of staging furniture is to help visualize and contextualize. Seeing a staged bed, couch, coffee table etc gives you a picture of how large or cramped the room is. AI furniture in contrast isn't limited by physics or reality and does not assist in showing the size of a room. It's only purpose is to deceive the viewer.

AR visualizations where virtual models that are true to real world furniture is much more acceptable.