If you accept visitors from the EU, you have to abide by their laws. If you're exclusively based outside of the EU, you could just ignore the laws. But Google has offices inside the EU, so they can't.
Google benefits from this and almost certainly secretly lobbied for it.
This is great for the FAANG providers who already have automated content control tools and massive help centres to act on anything 24/7. It is a death-knell to any upstart startup who would challenge Youtube or Facebook however.
Wouldn't they still get cash from advertisers? The sites are still accessible from the EU, it just means local businesses who want to advertise need to pay the US division?
As a general rule, in most jurisdictions, you cannot do business across international borders in this way, no. As soon as someone from the EU pays Google while they are physically inside of the EU, that business is subject to the EU's laws.
If someone in the EU buys it while they are in the EU, you just imported something to the EU and the EU's laws apply to you, yes. If that person buys it from you in the US and then carries it back to the EU, they have the liability for following law, paying duties and taxes, etc. When it comes to things that are completely digital, I believe where the money is changing hands is what matters most.
If they did so they can conveniently also ignore that $5B anti-trust fine.