The risk of space junk falling on people is tiny. The chief concern is around collisions in orbit. Worst case: "collisions between objects could cause a cascade where each collision generates space debris that increases the likelihood of further collisions," which could create a "distribution of debris in orbit [that] could render space activities and the use of satellites in specific orbital ranges unfeasible for many generations" [1].
These regulations are about protecting affordable access to space, by managing the risk of collisions.
(Eventually, yes, most things will fall down or burn up or drift away. But that process can take years if not millennia.)
The issue is that at those speeds, anything bigger than a fleck of paint hitting anything else will turn both things into a bunch of tiny chunks. See [1] for an example of two satellites colliding.
The big fear is that if you get enough stuff up there, even if you control most of it, one collision would be enough to trigger a chain reaction. [2]
[1] - https://en.wikipedia.org/wiki/2009_satellite_collision [2] - https://en.wikipedia.org/wiki/Kessler_syndrome
Edit : Low earth orbit is 180+km, for weather satellites because they revolve in 99 minutes. Geostationary orbit seems to be around 36000km with a speed of 3000m/s. https://earthobservatory.nasa.gov/Features/OrbitsCatalog/
So as r (the distance between the center of the earth and your satellite) increases, F decreases. But it never hits zero.
Though after a while (a Sun-Earth L point, is it?), the influence of the sun will be greater (by orders of magnitude) than the earths.
https://en.wikipedia.org/wiki/Sphere_of_influence_(astrodyna...
It does a great job of illustrating the potential impact of this on humanity in the not too distant future, and some of the jobs it creates (space trash collectors).
Space is big, but too much stuff goes into very similar orbits.