A similar stupid law was proposed by a Romanian minister some years ago but with the goal of stopping you calling people (basically ministers) idiots on website comments.

They eventually realized it's not enforceable and it just created some fuss.

The reason that died as it started is because there's no way how such a thing ever work or be enforced.

Does it not matter where I host my site?

What can Poland do about my website hosted in UK (or any other country)?

At worst this just destroys any hosting services that operate in that country.