I think you're correct. They were distributing an iOS app outside of the approved channels, which is explicitly called out near the very top of the Apple Developer License Program agreement:
Applications developed under this Agreement for iOS Products, Apple Watch, or Apple TV can be
distributed in four ways: (1) through the App Store, if selected by Apple, (2) through the B2B
Program area of the App Store, if selected by Apple, (3) on a limited basis for use on Registered
Devices (as defined below), and (4) for beta testing through TestFlight.
Applications developed under this Agreement for iOS Products, Apple Watch, or Apple TV can be distributed in four ways: (1) through the App Store, if selected by Apple, (2) through the B2B Program area of the App Store, if selected by Apple, (3) on a limited basis for use on Registered Devices (as defined below), and (4) for beta testing through TestFlight.