I've personally been using xtool on Mac hardware, where it's still very useful in that it's a lot more lightweight and declarative than Xcode, and for that matter when dual-booting a different OS (think Asahi Linux / Bootcamp Windows.)
xtool itself doesn't vend any traces of the Apple SDKs / toolchains, which is why the setup process asks users to download and provide a copy of Xcode.xip themselves, and builds the iOS SDK on the spot. I'm not a lawyer but one should definitely read the license agreement and determine whether their use case in compliance — you do have to agree to it before you download Xcode.xip.
And regarding distribution: since xtool works on both Linux and macOS, if someone is wary of publishing from Linux CI (say their CI provider doesn’t guarantee that their Linux jobs will run on macOS hardware) they're definitely free to perform the final App Store build on macOS CI instead.