Signal recently reaffirmed that they’d rather leave the EU market, than compromise security/privacy. With that they probably couldn’t force them to implement anything, but could force others to stop distribution. So it would e.g. be removed from the playstore. Not sure if they currently do, but they’d likely also need to close any servers they have in the EU. And maybe it would prevent people from donating to them (not using something like crypto to do so).

Hard to imagine how they’d stop distribution of the apk itself through other means, but I guess they could criminalise the use. Which ofc would be pointless like the whole push for chat control itself. It would punish those that just want the privacy/security it offers for legal purposes, and those using it for crime wouldn’t care about it being illegal. And if you’d ban encryption in general, then goodbye to anything related to banking, confidential corporate secrets, and so on. Also naive to think that having any kind of backdoor it would only be used by “the good guys”.