EU rules say Apple can't prioritize their own browser. PWAs only work with WebKit due to the iOS security model, and the amount of work necessary to try to support PWAs with third-party browser engines securely was way out of scope for the time frame to support the DMA. Because Apple can't prioritize their own browser, they had to remove PWA support entirely in the EU.
Naturally there was a lot of backlash, and so Apple reversed their decision and will continue to support PWAs with WebKit in the EU. This suggests that perhaps the European Commission told Apple that it was okay to do this as it does seem to violate the "don't prioritize your own browser" rule, but as of the last I saw on this it was still unclear.
