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If it was just a matter of being in the wrong rating category, it seems like it would make more sense for apple to just re-categorize it. Any insight into why they pulled the app instead of doing that?

IANAL but I'd imagine it is due to legal implications for Apple setting the rating. If Apple categorizes the app, it means they're essentially vouching for the app's capabilities. They need the actual seller to set the rating. That way if there's an issue, Apple isn't on the hook legally. They can wipe their hands and say "we just sell it, we don't vouch for the quality/integrity of the product".

Apple doesn't change ratings, or to my knowledge, any metadata about any of the apps.

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