I see the regulators only regulated that first-party and third-party apps be treated equally, and didn’t specify how.

It’s a bummer (albeit an expected one) to see Apple reducing the burden for third-party publishers to collect personal data, rather than increasing the burden for themselves to collect it, thus overall raising the floor of user privacy. This is to say, when a regulator requests “everyone be treated equally to ensure competition” maybe they should also take into account how users are impacted and instead request something more nuanced like: if there are unequal standards, they must be equalized in a way that maximizes user benefit.