How I can imagine it works: Amazon only provides the packaged software, the infra and the ops are officially driven by a 100% European company. AWS probably provides support, but they don't have the encryption keys not any access to the installation.

In theory Amazon could license the stack to a European Operator while having no operative access themselves.

I think this is already done in some cases altough the political reliability has not yet been tested.

By providing the software to be installed in clusters owned and operated by European companies.

The sovereign cloud spec designed by the folks at France's ANSSI agency is tight.