Is there a way to limit which installed apps a macOS user can use? If so, how?
You can consider moving all non-work related apps away from the /Applications directory, which are automatically made available to all the users on the computer.

A common approach is to create an Applications directory in a user's home home directory. This way, the apps installed in ~/Applications are only accessible to the user and not system wide.

The apps residing in ~/Applications would work in the exact same way as if they were residing on /Applications. There would be no difference in using them whatsoever. macOS apps are generally distributed as .app bundles. You can execute a .app bundle from any location in macOS. So, the exact location of where a bundle is located doesn't generally matter when it comes to using the app.

This approach works on any release of macOS, not just macOS Catalina.