I am aware that a real hairdresser has to do all these things, but the sort of stuff most of these ladies was doing was probably more like hair braiding, or what a friend did for me a few years ago when she helped me dye my hair using a box of hair dye (my shoulder was out).
And really, you can make the same case for just about ANY home enterprise, which is the reason almost always given by cities/counties/states for shutting down anyone who doesn't have 10,000 dollars plus in fees and training from doing anything.
After all, untrained babysitters can make mistakes but the USA has gone from a couple of afternoons of classes aimed at young people and taught by volunteers (often the Red Cross) to require thousands of dollars in training, equipment and special buildings - I know my Mom would have had to shut down her home daycare after 30 years if she hadn't retired when she did.
This result in poor communities isn't that children are not babysat, it just means that nearly every service to do so is illegal and/or the kids are simply left with a nine-year-old sibling (just like when my Mom was a teacher in the early 1950s).
Make food at home? Yes, that can be highly dangerous, at least in the last severe downturn here in Ireland the government was smart enough to realize people would do it anyway. So they had guidelines and restrictions on what you could bake and sell (no custard pies, or raw cheeses) but also what you could sell - bread, cookies, cakes (no cream), and the like.
Home knitting, as others have pointed out, what about the buttons used on children's clothing, and is the yarn flammable?
Like hairdressing (of the serious sort) all of these potential "jobs" have issues when done at home and when they are unregulated. But by putting the start-up costs and regulations at so high a barrier that no one who does not already have thousands of dollars can open one, it creates and encourages a totally unregulated underground economy.
I don't have any easy solutions either, but going after people on Esty is probably going to do more harm than good, except in the most obvious cases where people are flogging fake medicines or Chinese baby formula on e-bay. I think there are already fraud and safety laws that cover that sort of thing though.
Again the problem with this bill is that the requirements are so high that most people will shut down their business rather than even try to spend the hundreds or even thousands to comply and I personally think that is part of the agenda.