It's not withholding, it's just not part of the AppStore if you do it. There are plenty of other ways to distribute your software, and yes, Apple will also still co-sign it or provide entitlements if you need those. Just not in the AppStore.

That seems like an unnecessary and unreasonable trade barrier. There isn't a technical or user-experience reason to exclude these sorts of apps.

That's not the argument; the argument is that this would be some form of "there is only one method and it is being withheld", which simply isn't the case.

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