Yes, it is. The only change being made is that WebKit home apps are being allowed. Since Apple couldn’t create the Home app frameworks for third party apps, they disabled all of them to comply with the new rules. This just means that, unless the EU says otherwise, Home Screen WebKit apps are still ok without needing to open to third-party engines. This is a non-story as that is already the currently released functionality and the change was only made because Apple was attempting to be conservative with its compliance.
I don’t think they could, at least not in the timeframe provided by the EU. That’s the entire (and only) reason they’re reverting to the existing implementation. The existing law, as written, doesn’t seem to apply to PWAs.