Code that generates code - specifically user-specified code - has been allowed on the App Store for years now. They have a very patronizing term for it, too: "learn-to-code apps".

Granted, Apple's never going to give you the entitlements necessary to make this performant or let you create separate temporary containers for compiled apps like Swift Playgrounds can. But you can absolutely ship a dev environment on iPadOS as long as you're willing to deal with those limitations.