Stupid question: couldn't we work around that with some VM/container-style solution? They could probably find ways to lock it down with TPM/TEE and similar, but in today's landscape it should be possible if you're willing to accept the performance and battery cost. And if it does get traction, there'll also be more push to keep open alternatives viable. Giving in without a fight is the only way to ensure you'll lose.

Yes, some banking apps work on Waydroid.