Using a machine, instrument or technology for some intended outcome will nevertheless have a distribution of outcomes. Some good some bad. A kitchen knife will usually cut food, but will occasionally cut your finger. If maliciously used the bad outcomes become a lot more.

Two different machines can be designed for the same use case, but the possible bad outcomes in either "correct" use or malicious use of the two machines can be very different. So it is reasonable to ban the one which has unacceptable bad outcomes.

For example, while both a bicycle and a dirt bike are mobility vehicles, a park may allow one and ban the other.

Not necessarily. Interpretability of a system used to make decisions is more important in some contexts than others. For example, a black box AI used to make judiciary decisions would completely remove transparency from a system that requires careful oversight. It seems to me that the intent of the legislation is to avoid such cases from popping up, so that people can contest decisions made that would have a material impact on them, and that organisations can provide traceable reasoning.

I mean on the one hand I agree, none of these use cases seem legitimate, and most give off very totalitarian vibes.

However for those that might not be purely 1984 inspired, I do think that we need to have legislation that is capable of making the distinction between : - algorithms that can be reasoned about and analysed - "AI" systems that resist such analysis

The main issue is around responsability. Who would be held responsible for illegal (discriminatory) biases in an AI systems ? How would regulators even detect, specify and quantify those biases ?

In non-AI systems, we can analyse the algorithm and evaluate if the biases are due to errors (negligence) or are by design (malice / large scale criminality)