Regulations prevent many businesses from accepting Bitcoin. Governments restrict merchants from accepting Bitcoin, encouraging people to use only paper money or e-wallets for their transactions.
This is why more businesses don't accept Bitcoin due to overly strict regulations, which restrict their ability to freely choose their payment options. If Bitcoin were allowed, I think many businesses would try to accept it.
Regulations have changed from ignoring Bitcoin and ecosystem around it, considering it as illegal to alegal or legal, to better legality status and adoption on Bitcoin but together with this legal acceptance growth, there are more and stricter regulations.
It allows more business to accept Bitcoin legally and brings more people to Bitcoin ecosystem, and honestly, I don't think regulations are too bad for Bitcoin adoption. There is side effect as with more and stricter regulations, KYC is applied on more platforms but if you understand about Bitcoin blockchain, how to use UTXOs for inputs and outputs of your transactions, and basics of privacy, you can still achieve good privacy and anonymity.
Bitcoin privacy resources.Bitcoin privacy guides.