Yea the argument stated works better for rooted environments than rootless environments or sideloading.

In a non-root scenario, you would need to specify a few permissions to give a keylogger that amount of access. I think that a big issue is people not understanding that there is a difference between a rooted device or root installed app, and a sideloaded application.

Just because you have a non-google device or a rooted device != you have a compromised device. Applications aren't going to magically install running as root, every rom worth their salt keeps it a clear isolation between the layers, and some roms don't even allow you to use the root environment after installing it.

In your standard google phone install? A keylogger wouldn't be able to be installed without enabling an accessibility permission. It's not like you can just "oops I just sideloaded a keylogger haha silly me" like described. Both google installed and side loaded applications would require prompting a warning page that very clearly states it allows logging of the screen for the logging part of it to work.

Androids sandboxing is far from bulletproof

https://www.ru.nl/en/research/research-news/new-research-highlights-privacy-abuse-involving-meta-and-yandex