You're right on the money. It's noise and pollution emission standards. Don't know how though. My guess would be it sends a limiting signal the butterflies so they open/don't open fully, something like that. Other than retarding the timing (which I don't think an electrical signal can do on this bike) it's the only other way I know of to have any impact on the fueling.
I've been told that uploading the aftermarket exhaust map (AKA: Akra map) bypasses these because it is sold "for closed course racing" blah blah blah. Basically it's KTM punting liability off on you, which makes sense, because EVERY motor company of any kind does this.
I wouldn't be surprised if it can be disabled in TuneECU. I've never fooled with it (I fixed my bike back in TuneBoy days) but I'm pretty sure I could make a phone call to Ken Wheeler over by Deal's Gap and he could probably tell me in a hot minute. He's done a lot with TuneECU. Worked magic on my RC8 and my dad's RC8.