I work DoD projects and I just had a coworker fail the PMP. They scored very high in the business sector though and said that made more sense to them than the other areas. You may be more worried about it than you should be. As long as you continue studying properly there is little doubt you will pass the exam on your first or second try.
I manage public sector IT projects. Everything is compliance-heavy but also extremely slow to change.
The new exam outline shows Business Environment going from 8% to 26% . I get that they want PMs to think about strategy and value. But honestly? Most of my projects exist because a law said they have to.
For other gov PMs: how are you studying for this section? Are there specific regulations or frameworks I should actually know, or is it more about general awareness?
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®