However this is more related to EU regulation rather than Hetzner itself.
Hosting things within the EU has become really tough.
I, as a European, using mostly dedicated servers within the EU (including Hetzner) haven't noticed this at all. What are you referring to specifically?
Some "use cases" like building marketing profiles and alike certainly has gotten harder, but that's a feature so I'm guessing you're not referring to that. I don't think general "hosting things" has become any harder than before, assuming you're not trying to slurp up as much data as possible.
https://en.wikipedia.org/wiki/Network_Enforcement_Act
Unfortunately the act is designed to block vague categories like "hate speech" and "misinformation" and has huge fines attached, so it's designed to ensure that very trigger-happy enforcement is the only workable strategy. It was written to whack Facebook and Google primarily but it's possible that the wording also captures Hetzner, or they're worried that it might.
If they do feel they fall under it then they'd probably have to automate takedowns in response to abuse reports. As otherwise they'd need 24/7 on-call content reviewers, which goes against their low cost nature. So if this is the cause it's really an issue with German law being unfriendly to smaller/cheaper content hosters.
The questions here are rhetorical. It doesn't matter what we think the answers are. The penalties are so huge that if there's even a tiny chance of a judge disagreeing with you, then you have to take measures to avoid the risk.
But sure, maybe eating a broccoli will be construed as murder in the future, so best not eat anything at all.
they did NOT give any 24 hours.
I have no idea if that was the reason, though.