No, this is not fine. The is again another barrier to ensure that things are more difficult and scary when you don't use the official play store. It's an anticompetitive behavior again.

You are already logged on your phone interface when you try to install so this additional check is excessive. I could have understood to have it just in the case that you don't protect your phone access with a pin.

Also, to not be anticompetitive, the behavior should be the same when using the play store or not. Like asking your pin to use the playstore like what is done in iOS. Even if it sucks if you want my opinion.