To be fair the US is a bit on an outlier here, as it is not afraid to come down on US companies for things subsidiaries do in other jurisdictions, on questionable grounds. So it would not be enough for Let's Encrypt to operate a European operation to sign European certificates.

Should the US wish to sanction the Hague, somewhat famous for its international court of justice, they would absolutely go after ISRG and it would not be enough for them to sever the ties of the hypothetical Let's Encrypt Europe. That would not be legal or last least highly questionable in most other democratic countries.