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Here’s why Threads is delayed in Europe
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this post was submitted on 11 Jul 2023
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So looks like the main issue is not wanting data collected from threads combined with activity from other meta services unless European users opt in. And the second is requiring Instagram account to sign up for threads.
I think that's just FUD from Facebook. They want regulators to "clarify" the law in a way that favours Facebook.
"Oh look how very very bad this law is, we're soooo uncertainn! We can't even provide login via Instagraaaammmm in our new App that we can't launch in the EU. Booohoooo 😣😣😢"
In reality, Facebook has entire departments of lawyers who have clearly laid this case out internally at length.