The fact it's used by one or more browsers in that way is a lawsuit waiting to happen.
Because they, the browsers, are pointing a finger to someone else and accusing them of criminal behavior. That is what a normal user understands this warning as.
Turns out they are wrong. And in being wrong they may well have harmed the party they pointed at, in reputation and / or sales.
It's remarkable how short sighted this is, given that the web is so international. Its not a defense to say some third party has a list, and you're not on it so you're dangerous
Incredible
You're honor, we hurt the plaintiff because it's better than nothing!
The point I raise is that the internet is international. There are N legal systems that are going to deal with this. And in 99% of them this isn't going to end well for Google if plaintiff can show there are damages to a reasonable degree.
It's bonkers in terms of risk management.
If you want to make this a workable system you have to make it very clear this isn't necessarily dangerous at all, or criminal. And that a third party list was used, in part, to flag it. And even then you're impeding visitors to a website with warnings without any evidence that there is in fact something wrong.
If this happens to a political party hosting blogs, it's hunting season.
Lacking a global authority, Google is right to implement a filter themselves. Most people are really really dumb online and if not as clearly "DO NOT ENTER" as now, I don't think the warnings will work. I agree that from a legal standpoint it's super dangerous. Content moderation (which is basically what this is) is an insanely difficult problem for any platform.