So they really don't have a need to do this.
Apple can still make it difficult for them though. They can just remove the forbidden APIs and sandbox apps better. If they do this they don't even have to bother to review as thoroughly anymore.
The big benefit is that Apple no longer gets to decide what type of apps are allowed and what aren't.
Access to your photos, contacts, device identifiers, etc are all gated on sandbox entitlements, and if you remove the App Store review process then you remove the gate the prevents an app from saying "give me read/write access to the whole file system", "give me read/write access to the photos on the device", etc
That can be changed of course. They can make it work just like on Android where the user has to give permission for things like filesystem access.
The point of the law is to bring more control away from Apple and to the user.
The OS cannot decide when it should or should not trust the entitlements, because the whole point is that an app has some modicum of trust.
https://news.ycombinator.com/item?id=30280457
One should note that Meta could create their own Android third party store right now, like Amazon has (pretty much only to support their Kindle Fire devices), yet they haven't had any interest in doing so. One could claim that's because Android users don't pay as much for apps as iOS users do, but that's still a lot of users worldwide, and a lot of data that could be tracked. Yet they don't bother to.