What does it have to do with the regulations? Does they forbid open phones?

Because Apple didn't want to open their ecosystem, they invested a bunch of money (and time) into "exploring what's the bare minimum required to comply with EU regulations". Now Google is locking their ecosystem down the same way because they know they are legally allowed to do so.

This is why it's an "unintended side effect" of EU regulations, as the regulations prompted Apple to find out how much user hostile behaviour they can get away with.