it would fail on the public good criteria, that is the law is aimed at improving recycling rates not harming companies bottom line. If there was some protectionism going on it would be different. It should have the effect of making companies improve repairability (is that a word?) to make themselves more attractive to buyers.
I'm sorry, but how do you develop a worldview where "public good" is determined via corporate lawsuits? Is it simply in the intention of the law? Because from what I can see of the history of ISDS, harming a companies bottom line is the exact criteria by which these cases are judged. Outside of the tobacco labelling suit, I am hard pressed to find a case where ISDS did not result in a ruling against a government.