When Tesla takes financial liability for FSD (they don't currently, and no plans to) and backs that up in court, then it should be regulator-approved.
The thing about having cars drive automated, is there are currently no class action capabilities for Tesla to make the general public sign. Tesla will need to deal with lawyers suing them on every death/injury, regardless of what car owners have signed away.
What insurance company would accept such liability? Makes no sense.
Technology versus liability/law. The litigious nature of our society will tear Tesla apart.