Console makers are allowed to limit functionality on their own hardware. Shouldn't that also mean that Apple would be allowed to limit functionality on their own hardware?
Not seeing the point, just like console makers, Apple is allowed to limit their hardware as well. If they don't want NFC, then they should not build it into devices. If they want a floppy disc drive for iPhone they could do that as well. And if Apple just like anyone else is selling a device as a multi purpose device, then developers need access to it up to a specific level.
Think about it from the OS side. What if a 3rd party complained to the EU that they wanted iOS to have a feature that Apple hadn't added support for yet? Is that a scenario where Apple would be forced to include the feature?
But the EU isn't doing that. Apple already has all of that, they're just refusing letting people use it because they're not getting their cut then. It would be like Sony refusing giving access for GNM for developers, only providing GNMX for developers which would result in worse game quality, at least visually for the end user. No-one is asking Apple to implement completely new functionality that isn't already there.
No, it isn’t, but one of the arguments here is that third parties might implement functionality better than Apple, and that rationale applies just as much to the APIs themselves as it does to accessing them.
Yes it is. There's still a "hidden Apple layer" that wouldn't be open. Here's a simple example, I'm easily able to run things on a M1 GPU and yet I do not have access, nor do I know how Apples microarchitecture (and the translation for it) works. I'm using Apples compiler to do it as an "open API" in combination with their language (Swift + Metal Shaders). Again, you can see this in the work George Hotz did for his ML framework.
No one is saying a 3rd party wants to implement a functionality better than Apple on this lower, but not lowest level (which would still only be accessible by Apple). Simplified, 3rd parties want to use a Read/Write API for NFCs, they don't want to do anything lower level, that's still on Apple. With that they want to provide their own payment app using the high level API and then provide a functionally better payment experience. So instead of going Apple Pay on device -> Apple + Visa/Mastercard/AMEX/whatever -> your bank, they're going directly to App on device -> your bank. When anything goes wrong, you deal with your bank only vs. dealing with Apple, Visa and your bank which usually all play the blame game. That is the "better functionality" or rather payment experience.