That's not a problem in my mind.

I'd agree that forbidding individuals from installing it would be an overreach, because it would be a more restrictive step then is reasonably necessary to eliminate the legitimate government interest of counter espionage.

I don't think that the governments actions here are more restrictive than necessary for that. The fact that they make some legitimate actions more difficult is completely acceptable (inevitable even).

For most people the Venn Diagram of cars they can acquire, and road legal cars, is a single circle. The government mandating all cars, even those driven solely on private property, be road legal would be an absurd overreach. At the same time they have no obligation to make it easy to acquire non road legal cars just because their legitimate regulations have happened to make that difficult.