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No.

Source: Used to do enterprise Apple MDM for a living.

Does it block installing PWA's? Or are those linked to safari?

I think it will block using the PWA's, unless you add their bundle id to the allow list

I think it only disable the icon, not underlying frameworks, etc

I have App Store disabled on my kids iPad and it does disable updates. I have to manually re-enable it and install updates every few days.

I also searched for this and couldn’t find an answer.