If kava mixed with nothing but water can be sold as food in the states then it is a huge victory
If kava cannot be added to food, a product made with kava cannot be sold as food. It's merely a dietary supplement consumed via water extraction.
The FDA is poorly designed to regulate herbal/botanical products. Most of these food additive regulations are targeted at chemicals being created. With the rising public interest in various botanicals there will likely be inconsistent enforcement and confusion at all levels.
Edit : Additionally we now have states legalizing cannabis products for sale that the FDA has deemed illegal. These are raw herb botanicals as well as food products. Beverages, food products, etc containing components/extracts of the plant. Those products aside, historically the FDA usually doesn't step in and remove natural botanicals from the market if they are not marketed in a way that makes health or medical claims (whether the claims are accurate or not).