I agree that this proposed regulation seems like it probably won't help. Defining what counts as an ultra-processed food is challenging, and the actual causal link to health outcomes is far from clear. This article from Science-Based Medicine makes a good case against this kind of thing.[0]
What can we actually do to make people eat healthier though? Rising obesity rates are one of those societal problems where I'm not sure what the solution is. The best strategy I can think of is something like "do our best to solve poverty and hope that this helps with obesity as well".