So it turns out that the issue was unrelated to the underlying same-domain ruleset that governs link interception within iOS.

In App 1 we run a domain whitelist to allow only certain urls to open within its WebView. The urls that do not validate against the whitelist get booted out to the device browser to open.

It seems that we had the top level domain (and any subdomains) whitelisted and that was interfering with the universal link interception process.

Ensuring that the https://breakout.domain.com was not whitelisted for viewing within the app solved the problem and universal links are now getting picked up by the device. Winner winner chicken dinner.