Why is this cover acceptable for iTunes & Apple Music policy?

Yes it probably slipped thru by mistake. The Apple policy on cover art work is pretty clear in Sec. 7.3:

"Art must not contain website addresses, logos, or any other reference to competitors of Apple Music and iTunes."

This is a user-to-user technical support forum. No one here could speak to Apple policy on album covers. However, as Apple would have had to approve the content before it was offered on the site, I would assume they are okay with it.

What is your personal stake in this?

Then it appears you have already been told the policy. Perhaps this is something that slipped through by mistake.

Thanks for confirming that!