This could, of course, be an explanation. Except for the _stated fact_ that after they removed the batch import, they were still rejected.
"Batch import" is querying the system Contacts Provider [0] with essentially a "SELECT *" query. This requires the READ_CONTACTS permission, which is granted by the user via a runtime permissions dialog. "Batch import" under this definition includes the use case of displaying the contacts list in the app's UI, regardless of whether that list is cached offline or uploaded somewhere.
The "contact picker" is an Intent the app sends to the system contacts application, which then returns a single contact. The UI is handled by the contacts app, filtering options are limited/non-existent, and there's no way to display app-specific metadata. It also requires no permissions.
[0]: https://developer.android.com/guide/topics/providers/contact...