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It’s literally in the article: They want to use client-side scanning. The client already has the data decrypted. This is much like what Apple wanted to introduce with CSAM scanning a while back. It’s a backdoor in each client and it’s a matter of time until it will be abused by malicious entities.
If a messaging service is non-compliant, the government could theoretically take action with court orders against domain owners, server owners or pursue anyone hosting a node in case of a distributed setup. In a worse case scenario, they might instruct ISPs via court orders to block these services (e.g. The Pirate Bay in some countries)