To me it looks like this new legislation is intended to prevent the bypassing or overriding of emissions and 'safety' systems like catalytic converters, diesel DPF's, economy software in the ecu and GPS or roadside triggered speed restrictors in accident reduction zones and ULEZ city centres.
All modern cars now come with a diagnostic socket, so it will be very easy for the new law to be enforced through the simple expediency of plugging in a laptop and looking at the vehicle settings.
As such, I seriously doubt it will be retrospectively applied to carburettors, camshafts and tubular exhaust manifolds on 40+ year old classic cars, as there's nowhere to plug the laptop into. The comparatively low number of classic cars and miniscule annual mileage that each one typically racks up also won't register on the enforcers' radar.
It is likely to kill off the modern modified car industry as it will clearly capture basic tuning like ecu chipping, and is also likely to stop the fitting of lowered and/or stiffened suspension components, but the way we are heading, towards mostly electric vehicles within a decade, that industry is likely to decline anyway.
After all, trying to modify a Nissan Leaf would be about as exciting as taking your fridge apart to see if you can make it get any colder.
So long as the DVLA rules on rebeodied/rebuilt vehicles remain in place I can't see this new legislation affecting the current classic and kit car industry. I do wonder what will happen when the petrol supply dries up though
