Anyway, I'm not sure how much potential for abuse there is here. I don't see anything too horribly wrong with app makers being able to restrict their app to Play Store installation (though I think it's annoying, and sucks for e.g. GrapheneOS users). I'm not really sure why app makers would want to do this anyway, but I guess they have their (dumb IMO) reasons.

But to be abused, that probably means Google, or the handset maker, using the feature to prevent any apps from being sideloaded or installed from app stores they don't like (like Fdroid). That would be terrible for sure, but I don't really see how this particular technology would allow that. I mean, if Google wanted to prevent sideloading, it seems like it would be relatively trivial for them; why would they need something like this? Installing from APK is built into the system (you can do it with "adb"), and could just as easily be removed or restricted. Same for the handset makers: they don't have to distribute Android as-is, and usually don't. It seems they could easily disable apk-loading and adb in general.