Totally. It should be illegal for Edge, Chrome and other browsers to take any measures, such as a little warning, in an attempt protect users from malware. I see no way that getting the government involved in this could go badly.
No one implied that it should be illegal to warn anybody. However, it should be illegal to operate a large-scale service like this without offering some kind of proper communication and prompt action, which isn't unreasonable considering they're notorious for destroying someone's livelihood for no reason.
Keep in mind that the reason this happens isn't because of "faulty AI automated systems": the reason this happens is because these companies choose to save pennies by not offering proper support channels and recourse. Those saved pennies make the difference between a 2-hour outage and literally bankrupting you for no reason at all.
It made Microsoft sweat pretty good in the late-90s. They had to behave a little better, but not doing anything too anti-competitive, during a critical juncture of the internet's growth and adoption, while the anti-trust proceedings dragged on.
Just because there was no AT&T style divestiture at the end, doesn't mean there were no positive externalities.
I think the biggest thing that came out of that anti-trust case is the publishing of specs for various file formats and protocols used by Microsoft software.
And the duplication of... about two dozen string routines, from what I've been able to find.
The actual rendering engine was left to Windows (and to anyone who was using it, like AOL), the shell was left to IE to continue wrapping around it, and a few more things.
And because of that, a million flowers bloomed and now we have dozens of browsers engines and not one dominant player controlled by a large tech company…
Without that pressure, they could have pursued a more aggressive strategy with IIS and server technologies. Outlook was only mildly annoying. They could have been much more aggressive there. Microsoft did and does a lot more than Windows and Internet Browsers.