For what it's worth, I'd argue the same should be permitted of a small car maker. If I want to go build my own cars, step 1 should be putting a motor on a chassis and being able to drive forward. Step 1 shouldn't be adding airbags and seat belts to a couple axles.

The safest car is one that can't drive, and the most privacy-friendly software will fail to compile. You should be able to build a functional car before you need to worry about making it as safe as possible, and similarly you should be able to build a functional MVP of your software before you need to worry about compliance with a huge international policy.