Note, I think, you also need to be GDPR compliant for EU users when they are not in the EU. So I don't think IP blocking actually works for 100% of cases.

I would suggest not getting too hung up on this, it is showing you the worst outcome and assuming you have made a good effort to be compliant I should think things would be fine even then. No doubt you have Ts and Cs, that document is full of clauses put in place because of things like this, and any of them could probably result in a worse letter from a customer wanting to sue you over something. But I image also that hasn't happened to you yet either?