It is a good point about the bullying never stopping, but there are other ways to look at it as well. For example, online communities can be the escape for kids and a way for them to find support and friends if for some reason they are unable to in person. Sure the bill says they're aiming not to block chat, but it's not always a clear cut (e.g. discord, also not universally good or bad either).

I also wonder if removing the social media and the online bullying aspect will simply increase the ferocity of the in-person aspect, or even the overall depth as bullies may assign blame to their victims for them losing access to services.

I agree with the rest of your points, unfortunately it's evident the goal is not to protect kids but to remove anonymity and cater to the oligarchy - otherwise the government would be pushing social media sites to moderate themselves and service providers to give parents tools for this (or age verification in a manner that doesn't expose your identity outside of your device aside from the age group flag)