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It’s location-based. If you leave the EU, your sideloaded apps stop working.
Without a source I assume its hardware based. ;)
Much easier to do it in software.
Where‘s that mentioned?
So the law only applies to devices in the EU, not to devices sold to EU residents?
Your Apple ID has to have a European country set and the phone has to be physically in the EU. I don’t think where you bought it matters.