And even if they did agree to block e.g., Austrians from accessing some webpages of some Cloudflare costumers, they would have to base it on some geolocation, which is just one more can of worms.
As for doing legal content blocks based on geo-location, that is not a can of worms. It's table stakes, and I find it hard to believe they wouldn't already have that capability.
Because their customers are breaking the law? I agree that there's an issue with how to handle jurisdiction, but you can hardly ignore a court and then get mad when they take action against you.
Blocking is often used as an easy alternative to prove in courts that laws has been broken.
For example considering the list mentioned in the article (and I do not know which ones affected cloudflare): http://netzsperre.liwest.at/
Why should a US company censor a Russian website (rt.com) because it is on a Austrian list because of a EU regulation? Austrian citizens reading rt.com are not breaking the law.
And I better add, that I am not claiming that the content of those sites are trustworthy, but I do feel insulted that they do not trust me to read if I want to.
In an essay that seems to be a sober technical analysis of the issue, it's noticeable that they didn't even bring up this solution. I guess they don't want that solution either, so don't want to bring it up, not even to explain why they don't want it, it would only confuse things. But, I mean, we're going to think of it anyway...
So the court says "fine, just block Cloudflare's servers at all Austrian ISPs. Perhaps that will get their attention."
See, Cloudflare wants it both ways: They don't want to have to tell rights-holders who their free-tier, movie-thieving customers are, but hey, that doesn't mean you should block their servers. Right?
But yes, they want to have it both ways -- the only way available to you to block is an overreach that harms the internet, and we are not interested in providing you other ways to block.