That definition does not distinguish between internship and volunteering, only between internship and employment.
I can only imagine that several people have no idea what it is like to want to get employment in a field and not have the necessary experience to get a paid position. Because you are closing off avenues for people to get that experience. If you aren't willing to work somewhere in an unpaid capacity in order to build experience and connections with people who can give you a leg up, or even just to see if it is a field they want to pursue - fine, you have that option but why would you deny it to others? Does anyone think really that poor people will not still be at a disadvantage in employment if they have not had a chance to get their foot in the door through an internship program? They may not have the advantage of an attractive graduate degree so an internship can be a saving grace.
But sure, if it's so important to not allow anything that might be unequal, by all means ban it. Yes, lots of people will be screwed and stuck in poverty and you'll get all kinds of downward mobility because of it but that's so less important than making sure everything is equal.