Yes this is true. But what do you think is the reason? Like is it because there's heavy metals in the dye, so the plate is kinda toxic? Or maybe because it's just too fragile, chips easily, etc?

As the consumer I don't know what regulatory loopholes they are exploiting when they state "decorative use". I doubt the average consumer has the time to do this research. Because a plate is a plate and people will use it to put food on when it's sold in that way, the intended usage is obvious regardless of the tiny disclaimer.