Earlier quoted context omitted.
Regardless of the original contract, it's entirely appropriate for a vendor to tell the customer how to use any materials. Imagine a _leaded_ pipe supplier not being allowed to tell the department of war they shouldn't use leaded pipes for drinking water! It's the job of the vendor to tell the customer appropriate usage.
This is quite literally the norm for things with known dangerous use cases. Go look at the package on a kitchen knife and it says not to be used as a weapon
Edit: hell I get downvoted and look where the knife analogy got us. A load of weird replies miles away from anything related to AI or DoD.