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.
This is what’s somewhat surprising. If they followed most of the rules, and went a bit off on a few, no one would be as upset and it might even work. Now, I have a feeling the EU is going to be VERY clear about the rules and they aren’t going to be in Apple’s favour at all.