In a natural disaster setting an AM radio is a safety feature. Cell towers and GPS go down. Radio Stations have their own power.
AM carries a lot farther than FM radio. FM stations are good for maybe a 40 mile radius from the tower. I have often listened to AM stations 100+ miles away during the daytime. At night the range increases. So from an emergency viewpoint (natural AND man made), it makes sense to continue the capability of longer range communication, even if only one way.
I'm not in favor of regulations in general. But this is a reasonable one. You never know when you'll need the radio. Just look at the fires in Lahaina last year.