I guess the argument would be that a screened app store would block such a malicious app.
But since the trick requires the user to go to a malicious website to install this app, it seems to me that the user might similarly be tricked into entering credentials on that website.
This looks a lot like a Oauth request, where you are redirected to sign-in. You check the URL and enter the creds, with the assumption that you are using "Sign in with Microsoft" to login to the site since this is how that login flow works
But since the trick requires the user to go to a malicious website to install this app, it seems to me that the user might similarly be tricked into entering credentials on that website.