That's not quite right. If you turn it off apps may still be able to track you nefariously but they'll be violating Apple's policies.

Apple's explanation for wording it this way is that it's impossible to block all tracking through technical means at the system level because there will always be new nefarious tricks that malicious people will try to use against you. They can only do it at the policy level and try to punish bad actors.

That's clear but can't they turn the setting into "Require apps to ask consent before tracking" ?

But that’s a very different question. If you say yes, you get lots of pop ups from apps asking to track, and if you say no, they track you without asking.