I think that’s the rub, in my theoretical scenario, Apple is not blocking the distribution or sale of iOS applications through third-party means, they’d enforce their existing restrictions on and power over building iOS applications in the first place. Developers would absolutely still be able to distribute unsigned applications - end user iOS devices would just be unable to install them.
It sounds ridiculous to me, and as I wrote earlier, it would be a clear violation of the spirit of the DMA, but I don’t see any reason why this scenario would not be technically possible for Apple to pull off.
I think their original intent back when Proton originally launched was to just show generic Linux compatibility on any titles if it worked with Proton and was approved by Valve. I’m not sure why they stopped doing that.