Abandoning the UK market would hurt Apple more than it would hurt the UK. They are not a nation-state, Apple cannot wage diplomacy by threatening the government, they can only shoot their own foot off and say it was for the good of everyone.
It would also partially validate the EU's regulation if they abandoned the UK but stayed in Europe. Apple very much doesn't want to feed either side a line.
Then instead of mandating a backdoor to cloud data, the UK would just mandate backdoor access to the devices themselves, again forcing Apple's hand to either comply or GTFO, if they want it bad enough.
We're losing the fight, and people are as apathetic as ever around privacy and security issues.
Besides, never trust E2EE where you don't control both ends, but everyone here should have already known that.
It would also partially validate the EU's regulation if they abandoned the UK but stayed in Europe. Apple very much doesn't want to feed either side a line.