The law says that they have to compensate the news organizations when links to those news articles are shared on their platform. They are completely in compliance with the law because they're preventing those links from being shared on the platform.

This is in no way circumventing regulation. It's following it, the same way Anthropic is following copyright law by shredding books after they scan them. They're just doing what the courts said.

What I don't get is when people make rules with a particular outcome in mind, but don't reason through the incentives the rule creates.

For what it's worth, I'm thrilled that you can't post news links on Facebook and Instagram in Canada. The fewer people that visit those platforms, the better!

You could imagine another approach:

A tax on any advertising appearing alongside text information (so not video or audio). And then a public service subsidy for local reporting.

Both could be totally technologically neutral.