Specifically, SAE level 3 should be explicitly prohibited. Humans have proven, over and over, that they can’t handle that level of alertness while also not driving.
I'm not sure level 3 is a problem. In L3, the car is required to initiate handover and be able to give you a long time to take over. This may or may not end up OK. (Witness the Mercedes eyes-off, hands-off Traffic Jam Assist). If the car can do something reasonable 85% of the time when the human is unavailable, dead, or drunk and can't take over in 25 seconds that would probably be OK.
Level 2+, though, is a big worry. It fails enough to be dangerous, but many of these systems fail too little for humans to effectively monitor them.
Level 2+, though, is a big worry. It fails enough to be dangerous, but many of these systems fail too little for humans to effectively monitor them.