Although it wouldn't require a lot of work to allow side-loading apps on LineageOS and similar, LOS users would still be profoundly impacted by the death of the FOSS ecosystem.

LOS/AOSP/whatever users are a VANISHINGLY small minority of users, so "an app that only works on them" is an app that only works for a tiny minority of people. This would disincentivize developing FOSS apps altogether. A lot of projects will likely eventually die, and a lot that could have started will not.