The government is not doing those things. Valve is. The purpose of the social media law is to prevent people under 16 from from being able to post online (they're allowed to read).
Is it a stupid law? Yes.
Should it be the parent's responsibility to be aware of what their kids are doing/exposed to online? Also, yes.
I don't know how this has turned into some sort of discussion about the games themselves. It's the Community Hub where users discuss games that is the issue as far as the government is concerned. Valve has responded by making it about the games. Probably because if they blocked our access to the Community Hubs, most of us wouldn't notice/care.
All that said: Whether I agree with a law or not, I do believe the government should have the leverage to enforce the law. The other side of the discussion is valid also though. I believe Valve should have the right to say 'no' to laws from foreign nations. I don't know what the consequences should be in that case though. Provide refunds for our purchases and close our accounts? I can't see that being viable.
Like I said: fascinating to watch this play out.