It's not a bug! Apple is compelled to remove Home Screen web apps from iOS in the EU due to the DMA
What many thought was a bug has turned out to be a move made on purpose by Apple as the latter will not allow web apps on the iOS Home Screen in the European Union. On its Developer support page (via 9to5Mac), Apple notes that the EU's Digital Market Act (DMA) requires it to allow users to select a browser that doesn't use Apple's WebKit browser engine for the first time. Because of this, Apple said that it had to remove the Home Screen web apps.
Apple says Home Screen web apps on iOS are built on WebKit and they "align with the privacy and security model for native apps on iOS." This is important and Apple goes on to say, "That integration means Home Screen web apps are managed to align with the security and privacy model for native apps on iOS, including isolation of storage and enforcement of system prompts to access privacy impacting capabilities on a per-site basis."
However, without this isolation and enforcement, malicious web apps could read data from other web apps and even use their permissions to access the user's camera and microphone without his or her consent. Browsers could also install web apps without the consent or awareness of the user.
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Apple adds, "Addressing the complex security and privacy concerns associated with web apps using alternative browser engines would require building an entirely new integration architecture that does not currently exist in iOS and was not practical to undertake given the other demands of the DMA and the very low user adoption of Home Screen web apps. And so, to comply with the DMA's requirements, we had to remove the Home Screen web apps feature in the EU."
Apple adds, "EU users will be able to continue accessing websites directly from their Home Screen through a bookmark with minimal impact to their functionality." The tech giant also was forced to remove support for Home Screen web apps on Safari in the EU because the DMA requires equality for all browsers. Since third-party browsers can't have Home Screen web apps, neither can Safari.
The absence of Home Screen web apps in the EU was first noticed with the release of iOS 17.4 beta 2. The changes will come to all iOS users in the 27 member EU states once iOS 17.4 is released in the first week of March.
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Things that are NOT allowed: