Exactly, that's also the most reasonable interpretation of the designation too. 'Terms of Service' literally -> the terms you need to agree with for us to provide you the service. No agreement or no adherence -> no service.
Yes, it's absurd - "terms of service" are not practically any different to the rules of any other establishment or service provider. Breaking the house rules is not breaking the law. It should get you kicked out, not arrested.
To be honest I think all of this stems largely from gross incompetence/ignorance among the people responsible for this sort of legislation.
