It's not "arbitrary." The contract didn't allow it. CERN didn't buy it.
And even if it were "abritrary," the time to discuss that is when you are negotiating the software license with your vendor. This isn't shrinkwrap software being sold at ElBo under a clickwrap license. It's a sophisticated buyer who has a staff member dedicated to the job.
You can tell "roaming license" was valuable because this student went to a warez site to get around it. The vendor likely charges more for it, and CERN didn't want to pay it, so CERN voluntarily left that functionality off the table. Then the student decided to overrule CERN's negotiating and the rules CERN had explicitly set out[1]. Oops.
I don't get to decide the GPL is stupid and release modified software without source.
If you're going to have arbitrary "You can't use the software except at this location" clauses, then they should be applied consistently