I think this is an unquestionable overreach on the UK's part. If you live in any country that isn't the UK, you should feel the threat from this: the UK government believes that it is entitled to a backdoor on your hardware, even if you've never stepped a foot on UK soil or intend to. Mass surveillance is a threat to everyone, but this is not an instance of that, which has guards against it, like encryption. This is the UK asking for an encryption backdoor to everything, including for phones that never traverse its soil or internet boundaries, or even cross anywhere near FVEY collection devices.
This is a dramatic overreach of authority.