They reversed course, so it's not an immediate issue.

But to answer your question, they would have provided an OS update to only allows app installations from verified developers, no matter the source.

To get verified developers have to submit identification to Google and go through a Google process.

So it wouldn't matter if the install source was a third-party repo, or Google Play, the system would not have installed any applications not signed by a Google authorized certificate.

That becomes very problematic because it gives Google the ability to restrict applications outside of the Google Play Store ecosystem.

They were copying Apple's playbook from the EU wherein Apple was legally mandated to allow third-party app stores, and in response Apple required all apps to be signed by an Apple verified developer certificate, no matter the repo.

And wouldn't you know it, Apple either revoked or would not provide certificates to developers of apps Apple didn't like, such as BitTorrent clients.

Google has partly backed away from this plan, and it was only announced for "certified" Android devices, which yours isn't after rooting.

It does affect you indirectly though. If open source on Android gets harder, fewer people will do it.

From what has been explained to me in some other posts, the issue is that most probably this will land on AOSP level from which all de-Googled androids fork. And with Linux phones not quite ready yet (I'm observing https://liberux.net/ though) that leaves us at their mercy