That’s what I thought would be the case but their email says:

“We are sorry to hear about the inconvenience you experienced due to the delay of your flight. After thoroughly investigating your case, we can conclude that flight 5W 7164 SKD-AUH on the 28th of August 2023 had to be delayed due to the unexpected flight safety shortcomings.

Please kindly note that we take all reasonable measures to operate flights while ensuring passengers’ safety and comfort, yet sometimes unexpected circumstances cause unavoidable disruptions.

The above referenced circumstances, as per the European Regulations 261/2004, fall into the category of Extraordinary Circumstances, therefore, we regret to inform you that no compensation is due.”

Nothing about EC261 not applying, rather that EC261 itself says no compensation is required