This seems like the predictable outcome. Epic knew Fortnite would get banned when they started this; Apple is innocent until proven guilty, so no court will force Apple to reinstate Fortnite unless Epic wins its antitrust suit. But similarly, Apple's subsequent, second threat to ban Epic from doing other lines of business via macOS tools (e.g. Unreal Engine development) seemed excessive compared to other app bans, and seemed clearly an attempt to use their power to shake down Unreal customers as retaliation for the dispute.

I'm not surprised that Epic started this: they want their game store on iOS, and the only way that happens is via an antitrust lawsuit — and you can't bring an antitrust lawsuit unless you show evidence of harm (aka, lost Fortnite sales). Epic wanted Fortnite to be banned so that they could sue Apple.

I'm curious why Apple escalated, though. It seemed to me like they were playing into Epic's hand: they're currently under multiple antitrust investigations by the US and the EU, and using their market power on iOS to corral developers on macOS seems like a pretty obvious violation, and a novel one: when they banned XCloud from iOS, for example, they didn't also ban MS Office from running on Macs. Why would they try to do it now? When I first saw it I wondered if Apple knew something we didn't (since Epic would pretty obviously attempt to contest this in court), and that Apple was playing its own 4D chess game against Epic, secure in the knowledge that the court wouldn't grant the injunction on the macOS tools. But... Now it just looks like a fit of pique? Apple had already banned Fortnite when it issued the second threat to ban Unreal; the second threat ended with them getting nothing (the court prevented them from following through) and left looking like monopolists during the antitrust investigations. I don't get it.