Traditionally, the EU is eroding their market and terrible at writing laws. You can’t legislate product decisions. That’s not what people actually want.
As Facebook and their suits illustrate, you can’t always run an international and feature-full service with their laws. The requirements for federation will probably devolve to an email or SMS fallback or just a lack of service offered. Big companies that don’t want to retreat at the risk of market share will totally provide lip service to the rules and implement the exact letter of the law and nothing more.
I expect that the EU taking this and other action will be a lot like the GDPR: solving a problem and providing a few solutions but basically none of the vision. The GDPR mandates data-exporting out of a service with the idea of portability. Except no one offers imports so there’s no real portability gained, just auditability (which is nice).
I do agree that I expect long trials and significant fines. The EU will look good politically for taking a stand to those big American companies. Those big American companies will maybe write a big check but certainly appeal for a decade.