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Actually, it is retroactive.
The full section reads (note bottom):

g) a person born outside the geographical limits of the United
States and its outlying possessions of parents one of whom is an
alien, and the other a citizen of the United States who, prior to
the birth of such person, was physically present in the United
States or its outlying possessions for a period or periods totaling
not less than five years, at least two of which were after attaining
the age of fourteen years: Provided, That any periods of honorable
service in the Armed Forces of the United States, or periods of
employment with the United States Government or with an
international organization as that term is defined in section 288 of
title 22 by such citizen parent, or any periods during which such
citizen parent is physically present abroad as the dependent
unmarried son or daughter and a member of the household of a person
(A) honorably serving with the Armed Forces of the United States, or
(B) employed by the United States Government or an international
organization as defined in section 288 of title 22, may be included
in order to satisfy the physical-presence requirement of this
paragraph. This proviso shall be applicable to persons born on or
after December 24, 1952, to the same extent as if it had become
effective in its present form on that date

Actually, it is retroactive.
...
g) a person born outside the geographical limits of the United States and its outlying possessions of parents one of whom is an alien, and the other a citizen of the United States who, prior to the birth of such person, was physically present in the United States or its outlying possessions for a period or periods totaling not less than five years, at least two of which were after attaining the age of fourteen years: Provided, That any periods of honorable service in the Armed Forces of the United States, or periods of employment with the United States Government or with an international organization as that term is defined in section 288 of title 22 by such citizen parent, or any periods during which such citizen parent is physically present abroad as the dependent unmarried son or daughter and a member of the household of a person (
A) honorably serving with the Armed Forces of the United States, or
(B) employed by the United States Government or an international organization as defined in section 288 of title 22, may be included in order to satisfy the physical-presence requirement of this paragraph. This proviso shall be applicable to persons born on or after December 24, 1952, to the same extent as if it had become effective in its present form on that date.

Applies only to the part after ":Provided". That is what is meant by "this provision". If it applied to everything in subsection "g" it would have said "this subsection".

But don't believe me. Take a look at the notes section. It says:

Section 23(d) of Pub. L. 99–653, as added by Pub. L. 100–525, § 8(r), Oct. 24, 1988, 102 Stat. 2619, provided that: “The amendment made by section 12 [amending this section] shall apply to persons born on or after November 14, 1986.”

It also says :

1986—Subsec. (g). Pub. L. 99–653 substituted “five years, at least two” for “ten years, at least five”.

The very law that changed the "residency requirement", also stated that it was only effective for children born after November 14, 1986.

But, nice try.