What a stupid requirement. I run an app builder and offer my users plenty of ways to test their app beforehand, but outside of Google Play, since their system is just cumbersome.
This will make it nearly impossible to get an app published as a small business, since who the hell has 20 users just waiting for your app? It's already a huge struggle to help people with publishing their app.
The road to hell is truly paved with good intentions. All the scam apps will have no problem cheating this system, but honest devs will struggle. I can only hope Google reconsiders this requirement, otherwise it might be worth it to push my users more towards alternative app stores. We already support the Amazon App Store and the Huawei App Gallery (which are a lot easier to publish apps in), but the user base is just not there unfortunately.