The full message is:
'To intensify action against Britain and France, U-boats are now permitted to operate unrestrictedly in the area west of Scotland and the whole area off the French Atlantic coast, zones E and F. All ships are now allowed to be attacked on sight, without warning. This includes unescorted neutrals and passenger ships, but avoid action against American and friendly neutral ships. Outside these areas, the Prize Regulations remain in force.'
So you can attack neutrals and passenger ships as long as they're not US or friendly neutrals and only in specific areas.
I think BdU are trying to sink any neutrals heading for British and French ports. Given that the Wehrmacht are advancing through Europe and are about to get counterattacked by the British 1st Armoured Division in France, it would make sense to prevent resupply and draw the Royal Navy to the West of Scotland and ease some pressure on our ground forces. Any neutrals that are sunk can be blamed on mines anyway.
U-boat? What u-boat?...
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