I think this information might be incorrect. I upgraded to 17.4 on an iPhone purchased in Canada, with an Apple account based in Canada but with a EU SIM card and being physically located in the EU and didn't get the "pick a browser" dialog when opening Safari. I think it might not be SIM based after all. The only possible thing I could think of is that I have an activated but turned off eSIM from Canada on the phone as well. The physical SIM is EU, though (and is what is turned on and connected to the towers).
It does since iOS 17. For now you’ll have to enable it manually through Settings > Safari > Advanced > Feature Flags > Shape Detection API but I expect it to be enabled by default soon.