A film should only be shown in a theater to create a true cinematic experience. I don’t think the regulation is absurd at all. If Netflix makes films and shows them only within a TV format, than it’s a tv show.
The cinematic arts requires a cinema by definition.
A film requires an extremely large format display. Not a small high definition display. Ideally it'd be a large, high definition display.
How a film is displayed informs how the film is shot. The same would go for audio as well. How the audio is heard informs how the audio is mixed and mastered.
Not to be condescending, but it's really not hard to understand. People don't make films to be shown on a phone for instance. Or if they do make films to be shown on a phone, then it's not a film they'll be making.
The working definition of a "TV show" is a series with regular installments/showings overtime, or at least many shorter length shows. A "movie" is the opposite, with just one production film. This is flexible, of course, as a movie can have later installments, but it is not its primary purpose. There are many "movies" that never make it to the Cinemas because of bad production value, ie bad movies!
Your definition would call Netflix's recent film "Bright" a show, which of course it is not. Cannes is being ridiculous.
The cinematic arts requires a cinema by definition.