One point of the article is that the law is sufficiently vague that no one can know with any confidence just what the law does require.
Walmart employees, and Walmart, could get in a lot of trouble for processing, and not reporting, photos that some government entity later decides are kiddieporn.
What else can they do but play it safe? The fault lies with CPS. Agencies of the law ought not stretch their authority to the outermost possible limits, just to see what they can get away with. Police officers don't normally shoot civilians who point a pencil at them on grounds that the pencil was a sharp pointy thing and they took it for a weapon. Same idea here.