Better question: Is it possible to restrict open source AI?
If it is open then everyone has access. Any restrictions would be akin to demanding that linux not use strong encryption or firefox implement content censorship.
Its possible to restrict DIY building of pretty much anything if your end goal was to stop people from doing something outside of their basement with it. I can't build my own open source coal fired power plant and except to sell power without the EPA coming to kill me. Same would be if i used a open source AI that violated some new consumer protection / anti fraud law if i choose to use it over the public internet / build it into a product. Hell you could probably go after the devs for being accessory if you really wanted to.
The license really does nothing to protect your project from regulation its just that the government doesn't care about open source yet.
It hasn't proven possible yet but who knows what will be developed the future?
A lot of open source efforts depend on big companies training million-dollar models and giving them away. These companies will often apply some censoring adjustment to the weights, which the open source community then undoes through fine tuning.
But perhaps in the future new methods of censorship will be developed, which are radically harder to undo?
And of course, there's always heavy-handed options available - if we can require hairdressers to hold professional licenses, we could require the same of anyone who wants to upload to huggingface or civitai.
The license really does nothing to protect your project from regulation its just that the government doesn't care about open source yet.