Wow, you ran into a whacko. Sorry to hear it, but it’s not unusual. When dealing with all humans, there are a few bad eggs in any bunch.
Personally I don’t think there should be laws, because I can’t trust the government to create the right laws for any business really. I mean, look at what they’re doing now with the lead testing of children’s toys, if they don’t make an exemption for small businesses a great majority of Esty sellers will be forced to shut down versus send their one of a kind objects to be lead tested (and destroyed) for $10,000. This is the government’s definition of trying to make children’s toys safer, but look, they’re causing harm because they don’t know everything about the issue.
I’m a web designer who runs my own small one woman web design and hosting business. I have learned to deal with bad customers from my end of things, and I’ve learned when I was burned, and I’ve modified my business practices to help ensure I won’t be burned again. I believe this entrepreneurial spirit will in the long run let me create a more successful business than if I had relied on some government law.
And there are other laws that can be applied. As @Marina says, there must be some way to detect and present serial suers. At the least, you fix the problem the suer found, and you move on with a stronger business.