I mean studying a technology with this scale to assess its impact before allowing it freely is… not terrible?

Yeah make it work in the US where you can fly 4 hours in any direction and still land somewhere that speaks the same language, and not in Europe where a 1:30h drive takes you through 3 different countries that don't know how to talk to each other...

My understanding is that this works on-device (via the iPhone), so I wonder what the regulatory issue is.

Perhaps the regulations treat is as if you’re “recording” the person you’re speaking with, without their consent?