The implication is that, regardless of price, making the App Store more useful and valuable harms privacy for everyone, as it reduces the ability of people to resist Apple restricting features or functionality to App Store only, as they have already done with VPN apps using the NetworkExtension API. These cannot be installed outside of the App Store at all, even self-built ones.

There is also the issue of surveillance. Apple processed warrantless FISA surveillance orders for 30,000 users last year, per their own transparency report.

It's possible that people don't want Apple (and by extension the FBI and US military, with no probable cause or warrant required) knowing the apps they purchase and use, or when, or on which devices.

Being App Store only prohibits that, and requires that your users be subject to this surveillance.

It's the same issue with posting to Instagram, for example: deciding to donate free content to Facebook there makes the product more attractive to Facebook's users and makes it harder for small businesses to opt out of using Facebook's ad business. Decisions like this make the whole world worse.