Banned by who? The app is sideloaded, it isn’t on the App Store.
(“Sideloaded” here meaning from Apple/your phone’s point of view you developed the app and are just testing it, which is a fairly essential feature)
In practice, this would cost them billions if they don't do it very very quickly. The grace period for the European DMA will be ending in three to four months and this is exactly the type of anti-competitive behaviour the law was designed to ban.
That may start an arms race that'll inevitably be too costly for Apple to continue, but after the initial blow I expect many people to drop the platform all together, giving Apple a one-time quick win.