That is the exact point. A "best intentions" approach to e.g. solve age verification through a "privacy respecting" mechanism leads to the government mandating that only physical devices with the built in security verification mechanisms, as allowed via government approved signatures, would be able to run these age verification apps (because otherwise you could cheat the mechanisms). This is a direct attack on general purpose computing and facilitates digital fascism by requiring that all software is signed in a manner approved by the government (directly or indirectly).
This is not hyperbole - Android will be locked down in only 115 days [0]. Further, in order to enforce such an age verification mechanism, you will end up requiring all software to either account for why it would not need to be integrated, or integrate with such a government mandated mechanism. This introduces accounting, surveillance, and approvals for every possible use-case. How would an online forum dedicated to discussing political topics survive? They would have to prove that they are complying with such measures that increase the barrier to operate and ensures that any forum or other arena of interaction would have to be accountable and justify how they are verifying interactions within the bounds of these laws and mechanisms.
Further - beyond locking down devices you would clearly need to lock down networks and communication in order to enforce such restrictions - which leads to deeper and broader filtering / scanning / monitoring - and preventing workarounds such as VPNs to ensure that all thoughts and actions are within these government set bounds.
Further - it is essential to realize that the outcome of this is not the best case of a single measure - the outcome in many cases will be the combination of measures taken by many different governments across the globe that each cut away certain freedoms.
Again - this is not only about age verification or digital wallets - it is the continuous pattern shown clearly through a range of actions made over time by the EU to introduce client-side scanning, age verification mechanisms, locking down devices. It's not all in place yet, but it is certainly being aggressively worked towards. All of these mechanisms will directly facilitate digital fascism as it will literally become illegal to effectively read, think, communicate without it being inside the remaining allowed bubble set by the government.
Another post on the front page of HN just now is about France seeking to dismantle end-to-end encryption. It is then not about the best possible view of a single measure in isolation, it is that these measures will lock in digital fascism broadly unless you are able to see what they facilitate when combined.
[0] https://keepandroidopen.org/en/
[1] https://reclaimthenet.org/france-moves-to-break-encrypted-me...