The point of regulations is not always to prevent a bad thing from happening; the point is that when the bad thing does happen, it can be contained/handled more

The point of regulations is not always to prevent a bad thing from happening; the point is that when the bad thing does happen, it can be contained/handled more effectively, or that there are established and well-understood procedures for recovering from it. Regulations which say that hotels should be hotels and apartments should not be hotels are as much about containing the effects of bad actors as anything else.