The only reason this didn't turn into a disaster was pure luck.
The use of AllowedAPKSigningKeys afaik is to compare that key with the key used for signing the dev build. If its not the same, the dev build is rejected.
From what I've understood from this POC, its possible to bypass this signature check. The only exploit I can think of with this bypass is that someone who gets access to the developer's release channel can host their own signed apk, which will either get rejected by Android in case of update (signature mismatch) or gets installed in case of first install. But in either case, its still the same reproducible build, only the signature is different.
That still enables a supply chain attack, which should not be dismissed - virtually all modern targeted attacks involve some complex chain of exploits; a sufficiently motivated attacker will use this.