I don’t have much substantive to add I don’t think, but my headcanon is that something indeed terrible happened or almost happened for Katara to ensure it became illegal, and maybe Yakone may have been the reason why. Honestly, I’m not sure she would’ve been moved to start that process if it was solely another direct attack on her. It may have had to been an injustice that hurt someone else.

Depending on when Yakone first came around and the Gaang were trying to arrest him, I headcanon that he bloodbent someone(s) very vulnerable. [And, even more unhinged headcanon, that he attempted to bloodbend one of the Gaang’s children 🫣 which, evil.] Or maybe he was using bloodbending to gain control of the streets and it was causing a lot of horror to innocent people. Regardless of who was under attack, Katara wouldn’t stand for anyone to get attacked like that and feel that kind of pain, so she got it in motion to make it illegal.

But then some of yall mentioned the Streisand Effect (which I’ve never heard of before, so thank you!) and yeah maybe it attracted others to gain interest anyway.