Earlier quoted context omitted.
Yes, it is. My in-house process is none of Apple's (or Microsoft's) business.
As you have just found out, it in fact is. Maybe I'm wrong, but my guess is: they win this issue, and they still keep the overwhelming lead in app development.
As long as Apple stays #1 in developer mindshare, all that will happen is some pissing and moaning (as we're seeing). It's way too expensive to stand on principle and jump ship for Android.
But Apple has managed to snatch defeat from the jaws of victory before. If the day ever comes (again) when they desperately need loyal developers, this bit of contractual bushwhacking will be remembered.