Because policy is made by politicians, not scientists.

Selective breeding is a means of genetical modification, it is genetic engineering.

Your aim is to obtain a progeny with certain genotype so you are directing their breeding towards it.

That is why the term GMO exits, to make a disctinction between organisms that have been obtained by selective breeding and hydridzation vs organisms that have been obtained by genomic techniques.

You could crossbreed to obtain genetically modified dwarf strains of cereals that would not bend by the weight of their seeds.

You could push a microorganisms to certain environments during multiple generations to obtain a more resistant to toxic subproduct or an antibiotic without ever having to use genomic technique. And that is considered metabolic engineering. You could obtain the same result using genomic techniques too and that would be a GMO organism.