What's stopping someone from making a fork without the protocol? This will only work on closed-source wallets.
Nothing, of course, except they might decide that doing so is illegal. The AOPP protocol wasn't designed to make every wallet undergo KYC at source though, but rather require that centralized exchanges attach your KYC to your withdrawal addresses by having you sign a message from it prior to withdrawal.
There's no way governments will be able to enforce regulations on truly-decentralized blockchain networks. It's technically impossible.
True, but as we've seen in this thread, bitcoin is not actually censorship resistant. If the government get 51% of mining pools to comply with their blacklists, then they can simply censor any transaction paying to or from a non-KYCed address.