You are right that operating system is not defined. But the definition of operating system provider is this: "(g) “Operating system provider” means a person or entity that develops, licenses, or controls the operating system software on a computer, mobile device, or any other general purpose computing device." (emphasis mine)
Which should clearly exclude embedded devices.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB1043
That's a really good point. It feels like they intended for that to be up to OS providers to determine. But really that was the lawmakers' job to define. My assumption is that this law was rushed.