Yes it does, I don't want AI generating something that is illegal in my country. And it cannot make assumptions about where I live, due to VPNs and the like.
Doesn't this lead to the AI only being able to generate content that is legal in every country? That seems like a pretty bad standard and one that might even be impossible to meet given some countries with odd laws against specific things. If there were any countries which restricted speaking out against the government, should the AI be unable to generate anything deemed critical of those governments?
Also, if these are used in a professional setting, there is an even stricter criteria of not generating anything deemed inappropriate for that society. That might seem okay if we stick to an American only view (but even that I wouldn't actually bet on), but what happens if your AI shows things that violate very strong cultural norms of other societies, especially if those cultural norms run counter to our own?