Does requiring this expose us to liability? Does not requiring it?

Either decision can be challenged, and neither automatically makes a jurisdiction liable for a later fire. Governmental immunity and the public-duty doctrine generally limit exposure for code adoption and enforcement decisions, though the specifics are a question for counsel rather than for us. We are not aware of a reported case awarding damages against a jurisdiction for amending the residential sprinkler provision out of the IRC or for adopting it.

The prudent course in either direction is the same: Confirm the jurisdiction's adoption authority and process, document the public-safety basis for the decision, and administer the adopted code consistently. That last point is where adoption and amendment differ. Adopting the model code as written requires no justification beyond the code itself; the International Code Council has already done the analysis, and the sprinkler provision has survived every revision since 2009. Amending a life-safety section out is an affirmative decision by the jurisdiction, and the record should establish why.