The new Browser Engine Kit that allows alternative browsers to be installed is really a very deep integration. It's not just swapping out the browser and engine that users open as an app, it's swapping out all system integrations – webviews embedded in apps (in certain types of use), and importantly, PWAs pinned to the home screen. The APIs have a fairly sizeable surface area, and PWAs themselves have many features that require system support to implement.
My assumption would be that full PWA support will return, but that it was a significant amount of extra work that Apple decided to skip for the first implementation. I'm not sure if that was the right call, but they were under quite a deadline with the DMA coming in.
https://appleinsider.com/articles/24/02/09/something-is-happ...
Without clear communication from Apple, people will assume that the change is a strategic move by Apple to not cede ground being lost due to the Digital Markets Act.
I suppose a small bit of light (for me, not the community at-large) is that all of my targeted market is in the US. But I also acknowledge is they get away with that in the EU, the US will be next. Le sigh. This is why the Web is the best platform.