Everybody watches their competitors, it's entirely natural. It's solid advice to study them, and try to stay/get ahead of them where possible. This doesn't just apply to app features, but every facet of the business across many disciplines (sales/marketing/development/back office etc).
On the other hand, building a business based solely on a competitor's business decisions and not doing your own homework is the path to madness. We might take inspiration from our competitors, but we always check in with our customers next to make sure they actually want the feature. It's also our job to get feedback on not just what we're doing but also how we're planning to do it, as our users might have unique business requirements that our competitor's users do not.