You're both right. What you're describing is liability. A warning does not guarantee safety from liability suits, that's why the other options are preferable (only being a Chinese or outside-of-the-west manufacturer guarantees safety from liability suit).

But the problem with twisting chains is that it needs a warning.

And so both putting in the law, and arresting the kid, are a way to protect the borough, a government organization, from liability when something goes wrong.