If I read them charitably, maybe it's a "CA has a competitive advantage by having saner labor protections", an advantage which would be lost (relatively) as everyone in the nation would get it.
The theory of California losing an advantage is that California’s stance on noncompetes is an advantage, that it would lose if it were the national rule.
That's their point. Non-competes being unenforceable is the biggest advantage California has over every other state that has been trying to set up their own "silicon valley" for the last N decades. If the law is forced on them, they might actually succeed.
It’s already been losing it’s nice climate over the years.