Apple aren't interested in an even playing field, this type of muscling in is possible by design. There's a risk they'll turn developers off their platform, but providing they don't piss off too many at once, barely anyone will notice.
This case is because of the performance implications of persistent background location services, not because it competes with Apple. That logic makes no sense anyway since Apple makes money from this app! And, admittedly, similar apps haven’t been blocked, so clearly this isn’t a business “strategy” but one of technical implementation.
For example I use FDriod as much as possible only using the Play Store to get the few non-open source apps I use