No, it’s saying they’re being forced to support at least one insecure browser which would affect the security of an obscure feature so they’re removing the feature.

I don't think they're saying that. I read their statement more like "someone might build an insecure browser", which isn't that invalid a concern I think. I'd like Apple to be a bit more daring and just open up those APIs too, but I kind of get their incentives point the other way. Apart from some landmark design decisions, Apple is an extremely conservative company, and stalling on an issue like this is just what such an org would do.

But they already give the "insecure browser" access to display web pages, access the camera etc. They just don't want "runs best on chrome" pwas eating they're app store cake.

I know at least Firefox has per-site permissions for location, webcam, and microphone access. Is it a correct interpretation that Safari on iOS does not have this feature?

Their argument was they want the system (iOS) to enforce those permissions, not browsers on behalf of apps they've added.

Ideally there should be both browser-level and OS-level controls. Reduces the chances of things slipping through the cracks and it limits the blast radius in case a browser vendor can’t get a hole patched up quickly for some reason.

Safari has those features.

Nobody can build a secure browser.

Truer words have not been spoken! Maybe only second to nobody can build a secure baseband.

Security is well achievable, absolute security is not. Somehow almost everyone seems to grasp that intuitively, but a subset of IT keeps pretending they're the same thing.

Nobody but Apple has experience building a secure browser. [1]

[1] On iOS.