Nice in theory, until someone like Epic comes along and makes an app exclusive to their platform with a bag of cash, just as they’ve done on PC.
Funny you mention that because every Epic Games Store exclusivity deal they've done had backfired tremendously. Notice how the exclusivity deals happen less and less now? Because they didn't work. People just waited for the exclusivity to end so they could buy the game on a better alternative. Case in point: Borderlands 3. Borderlands 3 was EGS exclusive for 6 months, then within a week of launching on Steam the Steam version outsold the EGS version's lifetime sales.
In discovery from Apple vs Epic it was discovered that Epic Games was losing half a billion a year from the Epic Games Store, and it was all because of the exclusivity deals since they weren't making a return on those deals. Those deals did nothing but damage PR and cause a permanent black mark on the EGS, or as I call it the Cursed Fortnite Launcher, since most people use EGS for Fortnite and Fortnite only, as well as redeeming the free games.
Also would love to mention Epic Games tried to leave the Google Play Store and just release Fortnite for Android from their website. Hardly anyone downloaded the .apk, so their experiment backfired tremendously, forcing them to return to the Google Play Store (only to shortly afterwards leave again because of Sweeney's Project Liberty shenanigans looooooool)
Sideloading is not some perfect outcome without flaws, we’re inevitably going to see some platform fragmentation because of this, even in countries where it may not actually take effect.
I don't think you know what platform fragmentation means. Android is fragmented because it comes in different flavors due to the OS being open source. Samsung's version of Android is vastly different from Google's because of the changes they made to the OS. Same with OneNote's, or ASUS's, or Sony's, or Xiaomi's, and even Nothing.
iOS is closed source and only comes in three flavors: iOS, iPadOS, and next year visionOS. Adding new ways to get apps on these OSs does not fragment them, especially when said apps still run in sandboxes.