Since it applies to all EU citizens, there's no way for them to filter geographically or they wouldn't be honoring the rights of expats or anyone travelling. I'm going with dumber than rocks.

Or they have absurd amounts of cash and manpower to throw at the situation.

Yeah, and I'm sure there are solutions smarter than I can imagine, where all user-generated data gets consumed through a pipe and it's just a matter of having guards that look at the combination of user data type and user location and filter it out. But it feels to me like there are still going to be a million little branching problems at places beyond the pipe.