The tools will be used however the government wants them to be used. The government makes the laws and wages the wars, and the corporation will follow the law whether it wants to or not.
So either you are willing to work on a tool that is not under your control, or you are not.
While the government is accustomed to complying with software licensing rules, indeed it is not accustomed to being limited in warfare, so the two have now come into an interesting conflict.