This is one thing - retaliation. Apple is removing PWAs as retaliation against the EU and this also helps them, think about it, as I said countless times, sideloading won't most likely be "install any application from anywhere" like a regular computer, it will be "you can install applications from 3rd party stores that will have to buy a certificate and sign their apps as well".

By removing PWAs Apple makes sure nobody can use them to circumvent their bullshit policies and allow users to create their own small applications like people have been doing for ever when they want to avoid publishing to the store. Just think about it, the level of performance that you can get with a PWA is more than enough for your run of the mill in-house tool / application and I've seem many companies going this route.