The Magpies looked set to secure the double over PSG after Alexander Isak's first-half strike before a spot-kick in the seventh minute of stoppage time was given against them.
Mbappe swept home from 12 yards after Tino Livramento was somehow adjudged by VAR to have handled the ball.
The former Southampton defender was punished after a cross from Ousmane Dembele ricocheted off his chest and onto his arm.
Referee Szymon Marciniak initially waved away PSG protests before reversing his opinion after being sent to the monitors.
Why was Mbappe's penalty awarded?
Under UEFA rules, Livramento was adjudged to have made his body unnaturally bigger by the use of his arm.
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However, under the recommended guidelines for the 2023/24 season, the handball would not have been awarded.
UEFA's proposed addition to the handball law stated that no offence should be called if the ball is previously deflected from another part of the body, as was the case with Livramento's chest.
The governing body also made note of not interfering in incidents when the ball does not go towards the goal - which again should have applied as Dembele was attempting a cross not a shot.
talkSPORT's Adrian Durham explained: "This is from a UEFA press release in April, this is directly related to the penalty that's been given against Newcastle.
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"It says in their guidelines for the next season, 'The board recommends that UEFA should clarify no handball offence should be called on a player if the ball is previously deflected from his own body and in particular when the ball does not go towards the goal.'"
Unfortunately for Newcastle, the changes were never formally ratified and UEFA's guidelines still differ from the Premier League.
Therefore, while such a penalty would not have been awarded in the Premier League, UEFA still expect it to be given in their competitions.
Newcastle manager Eddie Howe gave a measured reaction to the late heartbreak following the full-time whistle.
Howe told TNT Sports: "I'm still coming to terms with it. I feel really flat but at the same time really pleased with what the players gave today. Their commitment, execution… We rode our luck. We ran out of luck at the end. I didn't think it was a penalty.
"What you don't take into account with those replays is how quick the ball goes. It hits his chest first. If it hits his hands first, well it's still not a penalty because he's so close. But you can make more of a case.
"It's not a penalty when it hits his chest first and then hits his hand which is low. I'm not allowed to sum it up. I can't say my inner thoughts obviously [I'd get in trouble].
"I thought the referee was having a good game up until this moment. He had been strong."