While you could technically hide this from them during the review stage, apple can stop any app from functioning on any iOS device connected to the internet by revoking the certificate, if they discover it at a later stage.
Are there noteworthy apps that break this term in the wild?
Any level of a game contains at least some logic like NPC behaviors, event triggering etc. and I'm sure scripting is a standard component of every single game.
Have you heard of Thimbleweed Park? It's basically a VM executing an adventure game language (like the creator's SCUMM VM in the past).
That's on the App Store.
Now if we specifically look at the downloading part, that would mean games on iOS cannot download new levels, which I think is done by a lot of games.
Their goal here being to cover their ass and have a rule, that you already "agreed" to follow, to point at when they want to get rid of your app. Apple's legal tech has always been years ahead of their electronic tech, I'm honestly curious to see if epic's got some sort of counter to apple's usual legal shenanigans.
This is extremely common in games, less so in productivity apps.
So you can have significant portion of your app in say javascript, which you can update OTA.
E.g. react native apps have most of their functionality in js and can use services like code push to update themselves without app store and it doesn't violate Apple ToS.