As far as I can tell this basically means that all apps must be approved by Apple to follow their “platform policies for security and privacy” even if publishing on a third party app store. They will also disable updating apps from third party app stores if you stay outside the EU for too long (even if you are a citizen of an EU country, with an Apple account set to the EU region).
The idea that preventing app updates is in line with their claims of protecting security is utterly absurd. “Never attibute to malice what can be explained with stupidity,” but Apple isn’t stupid.
It’s not malice though, it’s cold, unfeeling greed. Malice implies they want to cause harm; all they want is to extract maximum profit. Sometimes it’s by being malicious, sometimes it’s by being altruistic, for instance pretending to care about an oppressed minority in order to improve their image. The only decision is “will the cost of this action be less than the profit it makes?”