Essentially yes (and not just PGP), strong cryptography fell under arms regulations and required, essentially, the equivalent of a firearms license (but was, by contrast, almost impossible to obtain). Import and export of cryptography technology are still regulated, though [1].
> Do they expect people to trust them?
I’m not sure what you mean by that: This isn’t a trust issue, the French government is/was completely upfront about these restrictions.
[1] https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFT...
Same goes for Libsodium by the way, I doubt Franck Denis bothered to ask permission as well.
Though I agree it's not as bad as if they had been caught lying on the topic. Still, are they specifically saying the tool will protect people from the government itself?