I don't care what the military does. This is pure thuggery and abuse of the rights of private firms. Any time you contract with the government and they don't like your terms, will they designate you a threat?

In this context, that designation just means that the DOD won’t use your product and it’s suppliers can’t use your product for DOD-facing activity. That’s not “thuggery” it’s something any buyer can do. Walmart or whatever could do it too.