It certainly threatens their app store revenue, and by extension market value, so it's rational for them to push back, but by no means is it an "existential problem". Apple is quite a bit more than just the app store.
There's probably risks on both sides here, too: Playing hardball with EU regulators and courts could cost them a lot of money.
If your vision for your company only extends to the next quarterly earnings report, sure, it's "rational."
If you consider the fact that every other participant in the market dislikes this practice, that this dislike has finally risen to the level of government involvement, and that laws are about to be written taking it away from you, then clutching it to your chest is best understood as an emotional position.
It's rooted in a desire to not lose the past while attempting to deny that any other future could possibly exist. It's classic denial, on a trillion dollar corporate level.
There's probably risks on both sides here, too: Playing hardball with EU regulators and courts could cost them a lot of money.