Which flashlight app? As far as I know there is no official flashlight app (though recently there is a built in flashlight feature). How is Google responsible for a third party app that refuses to work without an internet access?
GP is saying that the Android permissions model requires giving Internet access to any app you install from the Play Store; there isn't a way for an app to request "zero permissions" (or rather, there is, but basic Internet access is a permission granted to all apps, even when zero additional entitlements are requested).
That said, this isn't unique to Android. At least as of a few years ago, iOS did more or less the same thing. (You can disable an app's access to the local network, but that's not the same thing as denying (or requiring an app to request) basic network connectivity).
As I understand it, apps that use the internet still need an entitlement, it's just that the Google Play store no longer shows that one in the list.
That's what it is, I think. The Play Store doesn't show it in the list of permissions anymore.