Mozilla’s executives don’t want to get arrested. It’s one thing to tell the Kazakhs to stuff it. Quite another to tell the EU, especially if any of them like overseas vacations.
But, if Mozilla wanted to acquiesce, they could release an EU-only version instead of weakening the trust/security of their browser for everyone.
Also, imagine the backlash that would happen if some part of the United States executive branch demanded the same thing the EU is demanding here.
Complying to the exact letter of a stupid law to avoid getting sued is understandable. Voluntarily complying to the broadest interpretation without any pushback is not.