This will result in different phones for different markets. For example, iPhone in Japan must play a sound when the camera takes a picture. This is not true of iPhones sold in the US. iPhones in some markets also are not allowed to have active 5G modems while, obviously, iPhones in the US are.
I think splitting the market will be fine. However, I suspect many side-loading-capable iPhones are going to have many more security problems and privacy breaches.
We’ll have to wait and see.
Security and flexibility are always at odd with each other. But for side loading, I'm not really worried.
Users that are susceptible to security problems don't have the technical know-how to even do something as simple as sideloading. Those who are technical enough usually are not the entry point for malware.
Thanks to friendly YouTube and web tutorials, non- technical users are great at hacking themselves:
If sideloading is made too difficult for average users, it would totally negate the anti-trust (competitive) benefits of forcing the platform open in the first place.
Either governments make sideloading easy and approachable to the masses, and accept the UX/security/privacy risks involved, or they make it cumbersome, and accept the continuation of the App Store monopoly.