Ok, so that's a no for startups.
You can either have the letter of credit or be a known quantity. Presumably it you launch your marketplace and it goes well, after 2 years you don't need the letter of credit.
The whole point of that $1M is to send send the message "stay out". It's like a rattle snake shaking it's tail. Basically anyone doing this has to treat that money as throw away money since Apple may keep that money for whatever reason, including criticizing them on current/future TOS policy changes.
Alternative take: the whole point of €1m is to send a signal “I’m serious about doing this”.
By giving that letter to Apple, you're just telling Apple "I could give you $1M but I'm not going to, instead take this letter that says that I could give you $1M if you wanted to."
No actual money ever changes hands.
Either apple found a clever way to comply to DMA without actually doing so or we'll soon be hearing from EU and apple will backtrack as it did with PWAs and Epic account.
Isn't publishing apps that wouldn't make it on the App Store the whole reason for alternatives?
Apple's still looking for a way to undermine the DMA.
This is entirely the point many people are up in arms about - the implementation is the problem, not the concept of alternate app stores as such.
There is nothing in most people's definition of a generic "app marketplace" that involves the steps Apple are demanding at present (stand by letter of credit for a million dollars etc).
If it was implemented fairly (and IMHO in the original spirit of the EU legislation), its pretty obvious what the advantages would be; being able to compete with Apple to offer lower fees and thus hopefully attract developers and sales.
Most outside observers with a reasonable understanding of the facts and a capacity for independent thought do not think this process is fair or implemented in the spirit of the legislation at all. Apple have made the process about as difficult as they could get away with while still appearing to follow the rules to secure their existing app store moat as best they could.