This architecture gives the "issuers" unprecedented gatekeeping and extortion powers. The section on "Equitable access" lists but a few, and belittles the risks as a mere "challenge". It completely fails to mention that this expensive, highly regulated machinery will unload its costs to users - i.e., exclude people who can't afford obtaining and "renewing" credentials.
On the side of the services, PHC is a dream come true for the delegation of discrimination: eliminate everybody from your service who can't afford or obtain a PHC, without even having to resort to profiling or buying background information, and with being able to deny all of this: "it's the issuer, not us, you see?"
Since you (seem to have) mentioned #eIDAS and #ESSIF: its concept of "trust services" / "issuers" suffers from similar deficiencies: tremendous requirements, resulting e.g. in no free trust services available (because providing them for free would be prohibitively expensive), resulting in discrimination and exclusion.
Concepts like eIDAS, ESSIF and PHC are typically lobbied for by businesses that intend to profit from becoming "issuers" or "trust services", and therefore urge legislators to "just specify the requirements", and "leave the rest to the market".