If they wanted to sue Epic back over frivolous patent violations, they're allowed, but if you're going to engage in retaliatory behavior you can't do it in a way that violates your own ToS.
Epic agreed to, and then broke, those terms and conditions. This results in account termination.
I'm not sure how this is retaliatory behavior. If I had an app and snuck violations into my app to get past review, then had my app removed, then instantly released a PR campaign and filed a lawsuit, I think it would be pretty clear to most people that:
1. I broke the rules and having my account terminated is the obvious result.
2. I didn't break the rules accidentally, but instead broke them very deliberately.
3. I am not interested in discussing this through normal channels, and instead broke the rules to get my app removed as a PR power play so that I would look like the good guy.
That's what happened here. Epic sneaking the IAP workaround into their app shows they broke the rules; Epic filing a lawsuit and launching a PR campaign instantaneously shows that they broke the rules deliberately, knowing the consequences, and are not interested in following the App Store T&C. Doing anything other than closing their developer accounts would be preferential treatment that other developers are unlikely to get in the same situation.
Whether you agree with the rules or not (Epic obviously doesn't), according to the terms and conditions Apple is doing the correct and obvious thing.