Imagine that somebody sold you text that they mislead you to think is not generated by AI and then trying to convince court that they didn't mislead you intentionally. If they've removed the watermark it stops this kind of defense.

These are corporate regulations, it's not really about putting individuals in jail. I do expect that there could be companies where trying to remove an LLM watermark is a fireable offense, especially in the EU where many kinds of decisions must be made by an accountable human being and may not be delegated to an AI system.

If someone causes financial loss by posting LLM text and is then found to have removed a watermark. Everything in civil law is implicitly inside a if(someone harmed && they sue you) {} block.