If you don't make money from EU users and don't want to be GDPR compliant you should probably just shut them off if you ever want to operate in the EU in the future
Then his/her last point is that they’ll give you a chance to correct things.
Your post doesn’t seem to cover that either.
But this is not a given every time and not everyone goes the nice route, some go directly to court. So when you are a small fish, you are better off doing your best to follow the GDPR in the first place than scrambling to avoid sanction in a limited time later. it is not that complicated to not collect data you don't need, ask before collecting it and informing about what you do with it.
This is not all the GDPR requires. You’re just describing traditional Privacy Policy.
How will they do that, and on what legal basis?
If the regulatory agency decides to fine you, and you don't successfully defend yourself against that in court, then you'll have to pay that fine. If you fail to pay the fine on time, any entities within the juristiction that owe you can be ordered to pay the fine instead (i.e., your payment processor will be ordered to redirect funds arriving for you to the state, which also, as far as their juristiction is concerned, fulfills their debt towards you--as far as their legal system is concerned, the payment processor has paid you and you have paid the fine).
Imagine a law that forced all companies in the EU to be polite to their customers no matter what or face fines. In that case you could also say that users would be pushed towards EU companies because they were "forced" to be polite, but I think that would be deserved and US companies could just do the same. Similarly to GDPR, if one side is forced to treat my data with respect and actively have me consent, then I would chose them, law or no law.
The 4% of worldwide revenue fine potential is exclusively targeted at the US tech giants. By my last count, the US has roughly 100 tech companies worth over $10 billion each (with trillions of dollars in worldwide revenue). Nobody taxes revenue, that's about the most moronic thing you can possibly do - unless you're doing it to try to harm / punish companies. Very few EU tech companies have meaningful worldwide revenue to tax.
They target revenue because otherwise companies will just use Hollywood accounting to declare they make 0% profit, they just pay huge licensing fees to some cayman island company.
GDPR is only a regulation stating more explicitly what you're required (and were always required) to do for compliance with EU privacy laws. It obviously was needed since privacy violation has become so blatant. The GDPR legislation has been a long time in the making. It might be the case that privacy in Europe is being valued more than elsewhere in the world, I don't really know, but it's nothing new at all. For example, in Switzerland (not in EU but certainly with humanist and very old democratic and civil rights traditions) privacy in the form of banking secrecy is held in even higher esteem.
Yes, as a collateral effect, some business models might not work in EU any longer, or not to the extent they used to (though ads and affiliation links had been on a race to the bottom anyway). But I'd say that's a win, or can be turned into a net benefit. Think about what the Web has become in the last 10-15 years. We still don't have reasonable micropayments, and nobody wants paywalls anyway, etc. The result has been the rise of "platforms" and monopolies where the user's data and attention is the product, with publishers of quality, nuanced content struggling or going out of business. While you of course don't owe dead-tree publishers anything, an economic model for content creation working for more people than it is now is still very much desired.
If you're perceiving GDPR as trading barrier (even though it's just a privacy law), please also consider the US's total and utter failure to get their antitrust regulations in gear: Facebook buying WhatsApp, Google buying DoubleClick and YouTube, etc. At a certain point, others will have to react to that kind of government-sanctioned monopolization to protect their markets.
The European Union also green lit those acquisitions. Hence the fines against Facebook for essentially lying to the European Commission about the merger.