Better PWA support gives users (and developers) more optionality with app distribution. Apple building out these APIs would not take away from their native apps.

The UX of visiting a site and with a single click of a button having an app on my home screen sounds great. I'd also like to have the option of side loading a native app too. And if those options sound unappealing, you can keep using the App Store if you want the assurance of using an 'officially approved' app.

A lot of very prominent apps are written using web technologies anyways. Take a look at the continued popularity of React Native (and Flutter as well).