Had a travel insurance do this and when I was in hospital in Asia I couldn't start a claim and the hospital nearly kicked me out. I'm sure the sysadmins thought it was a great way to reduce hacking attempts by blocking Asia.
I think it comes from the divorce of what people are hired to do versus what their work actually contributes to. I also remember the countless cloudflare turnstiles that I've had to get through one way or another on airlines' websites which reset every minute (looking at you, airserbia, for being the worst).
Mental note 1: Verify whether I can file a claim over the phone before I give a travel insurance company my money.
Mental note 2: Don't travel without being able to VPN through a U.S. endpoint. Preferably something sitting in my house.
If the government in question has free reign on regulating said traffic, it's an avenue for repressions and censorship
Otherwise it's a legal matter to seek action against such entities, which is already how it works
(... but I'm afraid we're actually mostly talking about "scenario 1 entities" here, which makes it futile to seek action from the very offices that already play a role in making it harder to use existing legal means)