Sleeping on your back isn’t a medical treatment. It’s a snoring reduction. You can buy snore guards, nose strips, special pillows etc to prevent snoring and none of those require FDA approval because snoring isn’t a medical condition.
Is it marketed as "intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals"? That's one of three things that gets you categorized under the FDA regulation. There's even a term for it: "SaMD".
It seems less likely to me that this is Apple being ruthless or pigheaded and more than you really do have to be careful how you market your iPhone apps.
I take your point; the FDA doesn't recognize "snoring" as a medical condition (but OSA is!)