I'd wager most App Store apps on the iPhone could be ported-over to PWA and retain 90% of their functionality - and people would still buy the iPhone.
Looking at my Settings > Screen Time history for the past week, these are the apps I use the most (in no particular order) and how I feel they would work as a PWA:
1. Microsoft iOS Remote Desktop Client: this could be a PWA with a WebSocket+<canvas>-based interaction surface.
2. Twitter: there's nothing I use in the iOS native app that can't be done in their web-app.
3. Google Maps: I think I'd be okay if I had to use the built-in Apple Maps instead.
4. Telegram / WhatsApp / Slack etc: Apps like these can't be used offline anyway, so being PWAs web-apps is also fine. As Slack is an Electron App (on Windows at least) then porting it over to a PWA is straightforward.
5. Authy / Google Authenticator / Azure Authenticator: I'll admit this is one that can't be done properly as a PWA right now because there's no way to reliably and securely persist client-side secrets.
6. Star Walk: this is one that can't be PWA: while the 3D world can be rendered in a WebGL <canvas>, it needs a large offline data cache and PWAs can only store 50MB presently (and that's 50MB as text, not binary data).
Most of the other apps I use are Apple's own or built-in to the device (iWork, Notes, Camera, iMessage, Mail, etc).
As for games: I stopped buying and installing iOS games on my phone and iPad a few years ago because there's no way to reliably download and "keep" games and apps you've bought indefinitely (e.g. as IPA files). Once a publisher removes an app or game from the App Store and you've removed it from your phone then you're SOL - you will get a refund if you contact iTunes Customer Support, but I view games as art - and the idea for a games publisher to unilaterally prevent me from accessing content I've paid for is horrible and reeks of Orwell's Memory Hole.
(Besides games-as-art that I've bought... and lost, the only other types of games I see in the stores are crass freemium bollocks - and I won't let myself get hooked on that business model).
(I think the last game I ever got from the App Store was "Rainbrow" ( https://apps.apple.com/us/app/rainbrow/id1312458558 ) - which was an experimental game using the then-new iPhone X's face detection camera where you move a character on-screen using your eyebrows - that was almost 3 years ago).
If Apple decides to arbitrarily disable some functionality in PWAs but not in-app WebViews then they're going to have a hard-time defending that, as all new web-standards specifications are built around privacy in-mind (as that seems to be Apple's overriding reason for not implementing some web-standard specification that benefits PWAs).
But PWAs aren't really suitable for Unreal Engine because of Apple's 50MB size-limit.
You believe they'd rather give up the iPhone than compromise on a more consumer-friendly ecosystem policy?