I interpreted it as "can't possibly be doing harm to the people in the video" - eg as much of mainstream porn can do - since there are none if everything is animated fiction

It's because some arguments against porn says the actors involved have it bad. Something that can't happen in a drawing.

I think it's more about the legal distinction between drawn and 'real' porn.

TBH "negligently letting children watch it" seems like a sensless statement to me. The onus should be on parents to filter their kids' internet environments, not literally every accessible site on the open internet (which are never going to comply with a patchwork of age verification regs).

Yeah, the “it’s just cartoons so it’s not harmful” argument falls flat pretty quickly. There are much better arguments to be made for why the law is dumb.