Android from early on represented an "open platform", and it helps to get a bit of context.
At time of its release the mobile platform was relatively unique with a developer toolchain that worked on Windows, Mac, and Linux. Every device could be put into 'developer mode' without the need to register the device with a central authorization server (see Apple's iOS and later Microsoft's Windows Phone).
Distribution of apps on non-smartphones was normally done on a per carrier basis and some of that behavior persisted through 2011 with AT&T removing "unknown sources" from their phones:
https://forums.att.com/t5/Android/quot-Unknown-Sources-quot/td-p/2814557
and carriers continue to bundle their own apps on devices sold on their network, i.e. bloatware.
Official developer documentation makes mention of alternative distribution:
https://developer.android.com/distribute/marketing-tools/alternative-distribution
As an open platform, Android offers choice. You can distribute your Android apps to users in any way you want, using any distribution approach or combination of approaches that meets your needs. From publishing in an app marketplace to serving your apps from a website or emailing them directly users, you’re never locked into any particular distribution platform.
So if you are a app developer, once you can afford the devices, you could in theory download the free developer tools, write the apps, test them, and deploy (corporate environment or a region unsupported by Google) without ever having to interact with Google in a official capacity.
Third party distribution apps include Amazon's App Store, Epic Games' Fortnite, and F-Droid (Open source apps).
With Android 8.0 fine grain install permissions were added so the end user now has the capability of blocking prior authorized apps without blocking others:
https://developer.android.com/studio/publish/#publishing-unknown