What "Your app playground must be run on Xcode 14 on macOS 13" means?

The complete requirement is that

Your app playground must be built with and run on Swift Playgrounds 4.2.1 or later (requires iPadOS 16 or macOS 13) or Xcode 14 on macOS 13.

So you can create your app with Playgrounds app. That will create a swiftpm package.

Then you must be able to open and run the app using Xcode 14 on MacOS 13

It will run in Preview but you can also run it as an app.

Hi, you can create your app playground via Swift Playgrounds on iPad or Mac. Make sure you are creating an app playground (.swiftpm) and not a playground book (.playgroundbook). Also make sure you are not creating a Xcode Playground (.playground) file, since the submission guidelines state that you should submit a .swiftpm file. When you submit your playground, you can specify what configuration we should use to run your playground (in Xcode or in Swift Playgrounds). So you can create a swift playground for iPad only, and it does not explicitly need to run in the Xcode iOS simulator (unless you specify that in your submission).