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This doesn't seem much like bullying. If you support third-party logins, one of them must be Apple's. And yeah, requiring two-factor auth in addition to that seems broken.

I mean, yeah, it's extra work for you as a developer, but as a user, I only want to use login with Apple, and if you ask for my phone number in addition, it's a delete for you.

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It's not a two-factor auth, we ask phone number confirmation because our masters need to contact you to deliver our service. If there is no phone number, our app is useless for you. So it's perfectly fine for us if you want to delete the app instead of giving up your number, and it seems like a better solution for privacy concerned people.

On the other hand, if we allow to login but only request phone number later, this will seem somewhat deceiving to the user. Like we pretended that he can use the app while keeping his info private, while in the end it ends up that he cannot.

That absolutely makes sense! It's a shame Apple misunderstood why you are asking for the number. I wonder if the messaging in that area could be improved? Or maybe the reviewer just wasn't paying attention.

Yes, I got some ideas from this thread on how to improve the messaging. We'll see.

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