I think the issue is not about distribution in the Play Store (I don't actually have any problem with that: their playground, their rules) but the fact that they are going to break sideloading and alternative app sources like F-Droid.

I struggle to see any good-faith need to erect additional barriers to protect users from running the programs they want on devices they own, when you already have to be fairly expert to enable developer mode, install via adb, etc.