This is a complete guess, but I think one of the differing factors between "bait" and "lures" is scent. A lot of soft plastics have a scent mixed into the mold when they are made.
However, as I understand it, if an area is marked "artificial flies and lures only" you can still use some sort of smelly jelly on your lures.
To my point, they have clouded the waters by applying an atypical definition to a commonly used word, thus confusing the intent of the regulation itself.
If it’s scent, they need to define that. And not by just adding it to the already commonly accepted definition of bait. “No bait, artificial scents or soft plastics,” reads much easier than “no bait” when ’no bait’ supposedly means ’no bait, artificial scents or soft plastics.’