Does Europe prevent the sale of US products based on that though?

Regularly, yes. On a lot of these sorts of products, nothing happens without governments making deals first. Mostly because governments have a need to make sure they get weapons too, not just money for the components they make.

Perhaps should be described as "sale is forbidden by default, but deals are common".

This goes 100% for either completed weapons, or components that can be directly used as a weapon, then you have "dual-use", and the less directly it's a weapon, the more free you are to do what you want.

We could if we wanted to. We just don’t have to behave like the biggest bully in the world in every geopolitical context.