But a very similar domain is the wrong domain. This is not a great novelty, people are aware that a ROJEX watch isn't the real deal, no surprise Fakebook isn't the social media site you actually wanted either.
In terms of authentication, this is where WebAuthn shines because it's tied to that actual domain name. Even if you're 100% dead certain this is really Facebook, your WebAuthn authenticator can't help you. There is no "Look, I know the URL says Fakebook, but ignore that, I am 100% sure this is really Facebook, just shut up and take my money" button.
Probably more relevant is that if I have registered luxowatch.com to sell my lovely watches, but am a small store, I certainly won't have registered (as yet) a bunch of global domains. There's nothing stopping you registering luxowatch.co.uk or luxowatch.net with a valid SSL cert to scam my potential customers. Cloning my site to one of those domains (with cert) can be done almost instantly for close to zero cost.
"What if they can register a very similar / regional domain that you didn’t set up already?"
In other words, they register fakebook.com and then just go get a TLS cert for it. If you're not looking carefully, you might not notice the difference.
Whether the CA system, with fungible, interchangeable certificates that can be issued by dozens of CA's (pinning excepted), is worth sinking lots of trust into is an entirely different matter ;)