Yes, we could just remove that law when that day occurs but that doesn't always happen so easily.
Absolutely false. All lithium ion batteries are made of 4 paper thin layers: two electrodes and two separators. These are cut in narrow strips and folded on themselves many times over, even in a thin battery. A thinner battery will simply have fewer folds. The distance between the two electrodes is given by the thickness of the separators and it has nothing to do with the thickness of the cell.
Here's a teardown: https://youtu.be/uI1eRy0uBI8?t=958 (possibly NSFW-ish language).
Seriously, I've never seen such a counter-productive regulation in my life.
A neighbor ended up having an illegal jerry can that actually worked.