Could there not be a reason that Apple made this choice involving their own legal risk? Sometimes what a law actually requires is up to what happens in court in the future.

I'm guessing Apple made the calculation that doing this was cheaper than litigating it. The slop submission in OP makes the claim that the law doesn't apply, but I skimmed it already and came to the conclusion it could apply and it will be up to the courts to make the precedent.

Part 5 is too broadly written: https://www.legislation.gov.uk/ukpga/2023/50/part/5

'internet services' is extremely broad and could include apple's own appstore, icloud services, maybe even their browser could be considered software acting on behalf of a provider.

Now of course they could be stretching, but OFCOM has their own overview that digs into just how broad they consider the legislation: https://www.ofcom.org.uk/siteassets/resources/documents/onli...

With all this being said, I do think Apple probably could have fought it and even if they had to leave the UK market, they'd still be fine. They rely on China and South Korea to manufacture their devices so they would not be fine without these markets.

It's probably related to the fact that Apple doesn't see itself selling devices, you don't really buy and own the phone. You rent a device from them and the Apple account is the doorway to that subscription plan.