TLE is advertised in a number of national trade magazines, Sprig. I know. I've filled out the applications myself. Thsu your argument about their market isn't pertinent. Their market is international, since that is where they sell.
They're not asking about rejections. They're asking if anyone else is considering it at the same time. That's what "simultaneous" means. It IS their business. That's why they bring it up. The people considering your work have a right to know about any potential conflict. TLE has in the past considered running stories on their web site. This would be a DIRECT conflict with the situation at hand. If they are starting to do that, or even considering it, then it is dishonest not to tell them.
However, the most important reason is, again, for professionalism. If people know you have a tendency to elide the truth, then they are much less likely to even talk to you. You would have to be a MAJOR player for them to consider otherwise. You can't afford to make bad blood in a business like writing. Therefore, whether you think it's a real conflict or not, if it contradicts their policies, even in a harmless way, which this DOES, however you want to represent the facts, then you need to make them aware. It can only do you good.