Not allowing iPadOS to be a full fledged OS, when it literally can (an iPad is just a Macbook Air with no keyboard at this point) is intentional attempt to reduce consumer surplus. The state can intervene to limit such technically unjustified attempts. And it should. And it does (thankfully).
Apple doesn't have to do business here, they can leave if they think the regulatory environment is not favourable for their business needs. The vast majority of people here won't care much or at all.
If you want to do business in the EU you follow EU laws, you don't need to do business in the EU if you don't want to, it's your choice to abide by them or not. The incentive to participate is in the EU being a huge and rich market.
Not to speak of "Buy American" laws which there's multiple (granted EU is "granted" "American" status under these laws -- but that can change at any time).
Europe's protectionism is mainly in foodstocks. And that protectionism is in part motivated by real reasons -- that of food safety (American cows injected by Bovine somatotropin, a harmful to humans, growth hormone, etc) or heritage (protected geographical status).
Conversely, Europe has a very liberal taxation regime for American corpos. That's why Ireland is the tax haven it is (same for Luxembourg and some others).