The FDA doesn't regulate "over the counter" oxygen sensors (including those you find at a CVS or Walgreens), but that study suggests that if they did, Apple could get an FDA clearance. They already have several FDA clearances for the Apple Watch's ECG, irregular rhythm notifications, and afib history features.

The oxygen sensor is helpful for detecting, among other things, sleep apnea, where 60-80% of people are undiagnosed.