They aren't banned from the App Store. The agreement that Epic's Swedish subsidiary is the standard developer agreement, and they can publish whatever they like in the App Store as long as they follow Apple's guidelines.
Apple has said as much for the main developer account in the past.
It is highly unlikely Epic would publish anything in the App Store, however, even ignoring the bad blood.
Part of operating an App Marketplace is that you are agreeing to the EU rules which include a core technology fee. So even an app with no in-app purchasing on the Apple App Store would cost them a substantial amount to publish.
