Damn, can't we just say we are sending money from one wallet of ours to other? They won't know shit TBH.
We don't have to tell them anything. At all.
As @pooya87 said, everybody will just switch to the decentralized platforms. We can (and should!) use hardware wallets without their crappy wallet platforms and go on.
The only problem I see is that this will slow down the interconnection between Bitcoin and the financial world.
So it clearly looks bad, but I have high hopes there will be plenty of ways to avoid EU crap when we want to and this may actually make people start using Bitcoin.. more properly.
I am already using hardware wallet, what if Trezor is forced to enforce these rules if they want to do business?
A software update from them which ruins our privacy, this ain't difficult if the government really wants it to be.