That won’t happen anytime soon. All phones use the USB protocol for data transfer regardless of the port and the USB group is committed to using USB-C well into the future. That means that you won’t get a speed boost over USB-C without going outside the protocol (which is insane) and that if you managed to get the USB group to come up a new speed it’s pretty much a guarantee that USB-C will support said speed.

As a sidenote, the “USB group” is a consortium of big companies, not a government body of any type. Pretty much every single big company who could possibly want to come out with a faster single cable data transfer method is in there, and that includes Apple.

Another sidenote, believing that USB-C can harm innovation in the smartphone space by limiting transfer speeds is ridiculous. No phone manufacturer gives two shits about wired transfer speeds, as evidenced by most of them sticking to USB 2 speeds for their devices (again, that includes Apple and their innovative Lightning port).

Finally, and to more directly answer your question, if that fantasy scenario you described were to happen the company responsible could just knock the USB group and EU’s doors and tell them about their fantastic new standard. If it’s actually an upgrade and it’s offered as an open standard they’ll probably just embrace it and update the standards and legislature. The point of the law is to prevent companies from coming out with myriads of shitty proprietary ports and standards, nothing more, nothing less.

And actually finally now, the law doesn’t ban alternate ports, it just requires a USB-C port. If all else fails the oh-so-poor innovation-starved manufacturers could simply stick their magic-fueled ports right beside the USB-C and call it a day.

You're still allowed to make a new standard. The law has allowances for new standards it just has to be agreed to.

It's honestly not a concern. This law was only needed because Apple chose to be dicks. The EU told every manufacturer more than a decade ago to sort out their standards or they will. Literally every single company but Apple got together and went to USB. Apple was the lone holdout that adamantly refused so now we have a law because one company refused to work with others.

The only thing better than perfection is standardisation. That being said, usb-c cables can have vastly differing functionality 🤓

Well, we've somewhat reached a point where that connector will suffice. Today you can easily support 40+ gigabits/ second of data transfer which includes the capability for high-refresh rate, high-resolution, displays. All while supporting over 200W of power delivery.

Now, you device today might not support that. But you can, today, with some types of USB-C.

Its hard to come up with something better at this point. The connector is small, bidirectional, and strong.

Like they have done for the last 8 years, laptops will slowly adapt the new standard alongside the previous one. If it gains market share and there is sufficient interest from the industry, lawmakers can always mandate the new one instead.
That being said, the usb type c connector is capable of many times more power and bandwidth than it is used for today.

Insert obligatory XKCD here.