That sounds more like a recipe for overreach than a method to escape the law, to be honest. Governments don't typically go "aw, shucks, you've caught us on a technicality" without getting the courts involved.

Clueless lawmakers will see this app called Element full of kids chatting without restrictions and tell it to add a filter. When the app says "we can't", the government says "sucks to be you, figure it out" and either hands out a fine or blocks the app.

There are distinctions between the community vibe Discord is going for (with things like forums and massive chat rooms with thousands of people) and Matrix (which has a few chatrooms but mostly contains small groups of people). No in-app purchases, hype generation, or kyhrt predatory designs, just the bare basics to get a functional chat app (and even less than that if you go for some clients).

I'd say being based in the UK will put matrix.org and Element users at risk, but with Matrix development being funded mostly by the people behind matrix.org that implies an impact to the larger decentralized network.

Matrix is a protocol, not a service

I thought it was both and their hosted service is in the UK. Is it not? I know people can host their own but I have had very little success in getting people to host their own things. Most here at HN will not do anything that requires more than their cell phone. Who knows maybe Discords actions will incentivize more people to self host.

Like all global finance goes through NYC, they will find a throat to choke if motivated.