From a quick reading of the actual law, here are some of the AI uses it prohibits that will apparently “stifle innovation”:

…use of an AI system that exploits any of the vulnerabilities of a natural person or a specific group of persons due to their age, disability or a specific social or economic situation

…to assess or predict the risk of a natural person committing a criminal offence, based solely on the profiling of a natural person or on assessing their personality traits and characteristics

…the use of an AI system that deploys subliminal techniques beyond a person’s consciousness or purposefully manipulative or deceptive techniques

…the use of AI systems that create or expand facial recognition databases through the untargeted scraping of facial images from the internet or CCTV footage

…the use of biometric categorisation systems that categorise individually natural persons based on their biometric data to deduce or infer their race, political opinions, trade union membership, religious or philosophical beliefs, sex life or sexual orientation