These “phony companies” could in turn be operated by state actors: as there have been physical product launches in the past, which turned out to be honey pots. Perhaps state actors, can no longer convince privacy enthusiasts (unfortunately including criminals), to fall for their honey pots, and shift efforts to tarnishing reputation instead.

has done nothing except for making people bypass it entirely

Which seems to be by design, based on similarity, to approaches taken by other governments: shifting the blame to citizens (reasonably) circumventing the legislation (creating the typical infighting), and granting further excuses to further tighten government control. Legislation as such, can only be introduced under a false pretense, or few politicians dare to be in support of such works. If introduced to “protect the children”, you can gradually shape it to effectively fulfill your interest; instead of spoiling true intentions right away.