Worth noting, this is a standard risk in Latam and the government that introduced them made it a constitutional amendment with a ten-year reversal process, since they wouldn't get any investors otherwise. The primary complicating factor here in Próspera's lawsuit is that they have not actually lost their investment yet; nine years to go.
But Honduras's response is to withdraw from the court system and legal framework that Próspera's suing them in, the ICSID. If they actually go through with this, that's going to be the end of most foreign investment in Honduras at all, charter city or otherwise. The ICSID is there to ensure that your investment stake won't be confiscated by the government when political winds change; Honduras is withdrawing because it wants to do exactly that, and no investor will risk that happening to them.
Also despite the article saying 'crypto' a dozen times their only relation to crypto is accepting it as legal tender, same as neighboring El Salvador. Instead of 'DAOs avoiding the FTC' one should think 'biotech avoiding the FDA'.