Other posters have covered the gist of the events, but what creates the impression of flailing for me is Apple taking a hard stance in one direction, underestimating the backlash, and promptly recanting and changing course in exchange for (as best as I can tell) no advantage or concessions. That happened with PWAs, and now has happened with Epic.

Maybe there were behind the scenes concessions made and I'm completely wrong, in which case I owe Apple management an apology. But my impression as an outsider is that there is no real strategy here; executives at the company seem to be throwing their weight around and picking fights at random, getting slapped down, and immediately retreating.