From a practical/business perspective, I can see the government's position. It's very simple and it makes sense. Here's an analogy that I think is apt:
We use Solidworks, Altium Designer and JetBrains tools for our work. Imagine a scenario where each of these companies has license terms that restrict their use to certain domains or types of products they --for whatever reason; it does not have to be political-- do not agree with. Further imagine that the restrictions are different for each product, creating a virtual mine field of sorts.
Now imagine that every supplier adopts this philosophy over time; hardware, software, tools, components, fabricators, contractors, consultants, etc.
Well, very soon you will have to conclude that the only job you will be able to do is drive for Uber, if that.
The DoD/DoW is massive and massively multidisciplinary. They simply cannot afford to have vendors create no-go mine fields for them. It quickly becomes an unmanageable pain in the ass.
So, yeah, under those circumstances, I would not touch Anthropic with a ten foot pole duct-taped to another ten foot pole. It simply would not be a reasonable decision to work with them.