> Are the devices parents are currently setting up lacking these controls?

It's an inconsistent mess.

> Is there no third party software which can achieve this?

No third-party software can force a standardized age reporting mechanism onto somebody else's platform and associated app ecosystem. A third-party unofficial age reporting mechanism is something that other apps are free to ignore. This law requires platforms to have a minimal but mandatory age reporting mechanism that apps cannot claim ignorance of and cannot decline to use in favor of an alternative age reporting mechanism.

> Then why is it a crime with an associated fine for me to provide an OS which does not have one?

Not a crime, just a civil penalty.