Its an issue with bundling. If a phone manufacturer wants to ship an Android phone with Google Play Store (and they all do), then they must also include a bunch of other Google stuff. The EU wants Google to license the Play Store but not force the inclusion of all their other apps.

So yes, a manufacturer could ship a phone with a de-Googled LineageOS. But they cannot today ship a phone with Play Store, but without Chrome, etc.

It's about the contractual obligations Google forced on makers. What the user does with the device after purchase is out of the scope of this ruling.

It’s for example not possible for Android device manufacturers to ship a phone with Google PlayStore installed but not also have Chrome be preinstalled as the default browser.