I mean the definition is:
(g) “Operating system provider” means a person or entity that develops, licenses, or controls the operating system software on a computer, mobile device, or any other general purpose computing device.
Note the three verbs there: "develops, licenses, or controls". Now the ideology of free software, of course, holds that the person or entity that "controls" the operating system software ought to be the device owner, so that one is arguably inapplicable to free software.
But "develops" means "write the source code", and "licenses" can mean "put under a free software license". I don't see how I can argue legally that if I'm developing an experimental OS in my own git repo, putting that under an MIT license, and someone in California then installs it on their computer, I am not the person that developed and licensed it. Will any foreigner who did that now be arrested when they enter the US?
If they had to at all, they should have written that law to apply only to operating systems that are preinstalled on devices sold in California. That would have been in the realm of product regulation that only manufacturers and vendors of computers in California have to ever care about. If some FOSS operating systems then do implement it so they can be sold preinstalled in California, there's nothing harmful about that.