For those who've been saying "but Apple has to do this because web apps have to load in the default browser"...
No. They don't. When an app is installed as web app, by the EU regulations it is fine for that web app to continue to open in the browser it is installed in. It's up to other browsers to provide that functionality themselves. We know for a fact that this doesn't matter because both Android with Chrome and Windows with Edge have this behavior; web apps installed with the default browser can still use that browser even if another browser is set as default. That doesn't violate any rules.
This is just Apple introducing more hurdles to force people to use the App Store where they previously could use none-native alternatives. And no, this also isn't just Apple being more strict about what a PWA is and is not like someone else here mentions, in that scenario this wouldn't be restricted to the EU.
This is just Apple being a petty anti-consumer company. Again.