If you want to publish a retro-gaming emulator as a hobby/open-source project, you can’t do that on Apple’s app store. And on a third-party app store you’ll have to pay Apple millions once it becomes popular (which would seem likely).

But it's a new thing you couldn't even do before. So the bar is not "raised". It's a new bar.

Also, is retro-gaming emulation really that popular in the EU? I don't think I know anyone who does that.

It’s certainly against the spirit of removing “gatekeepers”.

Retro-gaming emulators are quite popular here among nerds. I know several people who bought an Anbernic handheld, built a RetroPie, or similar.

> If you want to publish a retro-gaming emulator as a hobby/open-source project, you can’t do that on Apple’s app store.

why can't you do that?

See item 2.5.2 in https://developer.apple.com/app-store/review/guidelines/.

You can always release Super-Duper-Emulator-2

Since apps are still subject to Apple’s review process even on third-party app stores, they are likely to reject this because it obviously circumvents the new business terms (if it doesn’t violate them outright).