You can call it failure, but it's serving someone that engineered it. This isn't merely a failure to act or an unforeseen consequence, intentional choices have been made that knowingly trade human well-being for commercial interests. This is government serving capital interests before humanity or its own citizens.

I say it's specifically regulatory capture because of the way one regulatory body is defeating protections provided by another one. The dangerous and popular class of vehicles exist to thwart regulations that apply to what was previously considered normal-sized vehicles. If they could they would have just done away with the regulations, but they are limited to their captured offices' authority.