It’s not about prohibiting e2ee; it’s about enforcing client-side scanning.

Yes, that also breaks e2ee, but they can still go “nooo! E2ee is still perfectly fine and legal! You know, as ling as we get to read anything anyways”

And realistically, this will probably end up being implemented on an OS-level as well. So even using a self-hosted matrix server would not be immune.

Not to mention that both you and your conversation partner needs to take steps to evade this; one party is not sufficient.