The protection is for government employees who face retaliation when they report UFOs.
I had a buddy in the Air Force who had an encounter that damaged his aircraft. There were three witnesses to the incident. They all shared the same story. The investigators refused to accept the account. The pilot was blamed and got an official reprimand that effectively ended his career.
The legislation solves nothing, since they can always claim the sighting and report violated national security since it was one of ours.
Of course it would violate national security for them to tell you whether or not the claim was true!
Catch 22.
Welcome to the National Security state.