It outright prevents existence of new browsers and competition and it's a flagship examples of monopolistic corporations killing innovation and competition.
You yourself admitted that free market was required for current iPhone browser to exist and Apple locked out free market.
No it doesn't. Tens of new browsers appear on multiple platforms every year, in parallel with Apple's approach. All of them fail to gain significant market share, and most of them are based on Blink.
The bigger obstacle for browser innovation is the complexity of making a modern browser. That complexity is actually partly driven by developers demanding constant feature expansion in browsers. It's been great having web apps explode, but also that makes browsers fiendishly complex.
That's a fundamental misunderstanding of the term.