You can stick with the existing terms, or switch to the new ones (which is when the core technology fee kicks in) -- you only have to switch to the new ones if you want to use your own payment processor or distribute on another app store.

So they've basically made distributing popular free apps on an alternative app store really unappealing.

No, you can choose to stay on the current terms.

"Developers can choose to adopt these new business terms, or stay on Apple’s existing terms. Developers must adopt the new business terms for EU apps to use the new capabilities for alternative distribution or alternative payment processing. "