Based on all I know about Deemed Exports wrt software and current US controls on software Deemed Exports, your read is spot on.

The phrasing of the foreign nationals implies a Deemed Export control, which is already in place for software for stuff like drones or space satcomms.

If it's a Deemed Export control, it's a strategic position and not a knee jerk reaction about cybersecurity threats.

It's a coherent read too; if Fable can solve coding and build biological weapons (X to doubt) - well then terminal guidance and autonomous drone controls should be a piece of cake for it and that software is already under Deemed Export restrictions.