You're assuming that the user actually wants to sign up. In reality, it's likely that they're just clicking "Continue" in order to get rid of the dialog and couldn't care less about a signup.
Users want to use the site and don't care whether or not they are signed up. They do care about going through tedious registration forms and email verification codes. That's why sign-ups go up so much - users know they won't have to deal with the registration tedium.
They trade that for the tedium of dealing with being automatically added to email lists for sites they don’t even remember signing up for and only used one time.
All the spam email is why I’m very picky where I choose to register.
They have yet to block the Apple email relay. Granted, I haven't used it or tested it on every site. That said, Apple has one advantage other filters don't have, which is people who own Apple devices tend to be desirable to very desirable customers, which means adding friction to this would drive away higher average spenders.
I also use the fastmail.com masked email address for things, and that has not yet been an issue either.
And if you have an app in the AppStore and you allow third party sign ups through Google, Facebook, etc. You must allow “sign in with Apple”.
There is absolutely no app or service that I would use thst forces me to sign in with Google and doesn’t give me a choice to Sign in with Apple and let me Hide My Email.
I've encountered one site that didn't accept a Fastmail address. I don't know what they expect me to do - I'm not making a Google or Microsoft account just to register on your dumbass website.