Its just a bit of convenience-lore.
A way to explain away why from morrowind to Oblivion we lost levitation.
I dont take it too seriously.
The levitation act would only apply to Imperial instituations such as the Mages guild and the College of Battlemages.
The Telvanni, the Psijics, the necromancers and any number of other organisations would have no reason to obey it.
The Septim Empire is now defunct and so is the Mages guild.
I cant imagine why there would be a levitation act in the Tamriel of today.
I believe that gameplay and lore differs quite a bit here, as I believe mages to be vastly more powerful than portrayed in games.
Leviation, teleportation, spellmaking, all these things are still very much present in the Tamriel magic lore in my opinion.