It's not enough for the government to know. Platforms, websites, and advertisers want to know. That's why the law facebook has been pushing for doesn't have a simple "is 18+" flag but instead has a long list of age buckets so that advertisers and platforms can target specific demographics even when they are minors.
The law doesn't require any protection levels at all. It just requires your OS to tell every website you visit which bucket your children fall into. Every website and platform can use that information in whatever ways they want, even if it's just to adjust how best to groom a victim or to decide which ads to push at a child. They could also use it to say that a 9 year old can't watch a certain video that a 13 year old can, but that would be entirely their choice.
I mean, as much as I don't want the Government to be able to do that, I don't want private industry to be able to do that even more tbh. Though both options are pretty horrendous privacy-wise.