Only they know what they are afraid of. But seems obvious that a feature like that should also be available with third-party headphones, the translation happens in the phone, not the AirPods. There is no technical reason other than locking users into their products.

I'm sure Apple would say that the experience would not be the same with other (lesser) headphones, and that damages the user experience, etc. Some people would believe that's the reason, but the EU won't and neither do I.

They are complying in the same way that the rich kid who keeps getting called out for using his hands on the football (soccer) field complies with the rules by taking his ball and going home.