There is no requirement that you only support apple sign-in, you just aren't allowed to require user's to sacrifice their privacy to use your app.
If Instagram is using https://developers.facebook.com/docs/facebook-login/ with the little “log in with Facebook” button, it’s a social login. If they have their own proprietary way to do it in-house, it’s not, and not subject to Sign In With Apple.
If it "chose provider" then yes, apple could shove in their own with the pretense of user privacy, while it is painfully obvious that it's just leveraging their appstore control to grab market.
Not even OAuth can be unambiguous. I can have a single OAuth login. That could be myself as provider, or leveraging some other provider, which could be more or less connected to my app.
The comment is saying you're free to implement your own auth mechanism using plain ol email or a phone number, but you also have to support Sign in with Apple
a. actual users have a non-FB/Google OAuth identity
b. apps have something other than google or facebook login?
I've literally never encountered an app that had anything other than google or facebook for their oauth login. The only site I ever encountered that used something different was stack overflow a decade ago, and I recall them killing it off or at least complaining about it.
I suspect that the reality is that in a regular user's experience Google and Facebook login are the only ones they've ever encountered.