It's more simple, imagine Cloudflare is used to show pedophile content, and refuses to remove it. Then the solution is to cut access to Cloudflare.
That's the logic here. It's not about whether they have offices or not, but whether they are distributing content to users in Italy.
There is always a local relay or ISP in Italy that offers access to Cloudflare, and this relay can be coerced into blocking Cloudflare.
Of course 1% of people may be able to access otherwise (for example, via Starlink or VPNs), but the objective is to block 90%+ of the traffic, so Cloudflare reconsiders following local laws.
That's the logic here. It's not about whether they have offices or not, but whether they are distributing content to users in Italy.
There is always a local relay or ISP in Italy that offers access to Cloudflare, and this relay can be coerced into blocking Cloudflare.
Of course 1% of people may be able to access otherwise (for example, via Starlink or VPNs), but the objective is to block 90%+ of the traffic, so Cloudflare reconsiders following local laws.