Android shouldn't be considered Open Source anymore, since source code is published in batches and only part of the system is open, with more and more apps going behind the Google ecosystem itself.
Maybe it's time for a third large phone OS, whether it comes from China getting fed up with the US and Google's shenanigans (Huawei has HarmonyOS but it's not open) or some "GNU/Linux" touch version that has a serious ecosystem. Especially when more and more apps and services are "mobile-first" or "mobile-only" like banking.
Allowing apps to say "we only run on Google's officially certified unmodified Android devices" and tightly restricting which devices are certified is the part that makes changes like this deeply problematic. Without that, non-Google Android versions are on a fair playing field; if you don't like their rules, you can install Graphene or other alternatives with no downside. With Play Integrity & attestation though you're always living with the risk of being cut off from some essential app (like your bank) that suddenly becomes "Google-Android-Only".
If Play Integrity went away, I'd be much more OK with Google adding restrictions like this - opt in if you like, use alternatives if you don't, and let's see what the market actually wants.
In other words, there aren't many banks that let you take sensitive actions with just a browser and that's been true since the start of online banking.
These days they also apply differential risk analysis based on the device used to submit a transaction and do things to push people towards mobile. For instance in Switzerland there's now a whole standard for encoding invoices in QR codes. To pay those you must use the mobile apps.
Edit: people are getting hung up on the "never accepted browsers" part. It means they only use the browser for unimportant interactions. For important stuff like login or tx auth, they expect the use of separate hardware that's more controlled like a SIM card/mobile radio, smartcard or smartphone app. Yes some banks are more lax than others but in large parts of the world this was always true since the start of online banking.
I guess the smartcard reader is equivalent. But my point is that locking down the OS of the phone is sufficient to establish client trust but not necessary. You should always be allowed to run the app without strong Play Integrity verification but then just be required to scan your hardware token with NFC in every authentication and authorization flow.
My bank does still allow login and txns to be authorized with a smart card reader. You have to type in fragments of the account number to authorize a new recipient. After that you can send additional transactions to that account without hardware auth.
Pure NFC tokens don't work because you need trusted IO.