Mozilla is unhappy because the use of browser engines other than WebKit will be restricted to the EU, forcing them to develop two different apps.
For an independent browser like Firefox, managing two browsers is not easy, so it can be forgiven that this could be seen as almost harassment.
Also, the fact that the use of browser engines other than WebKit is limited to iOS means that the use of WebKit is still forced on iPadOS, which also increases the effort for Mozilla.
My wife has an iPad and one of the things I hate the most is that you can’t install adblock extensions into Firefox on it like you can on Android. Which is a thing that has made using the browser on the phone wayyyy more enjoyable.