You don't need that permission if the user gives their implicit consent by selecting the Documents directory in the browse window. That's why most apps don't even show up in the Privacy Settings at all. Most apps don't need that, because they don't try to access that directory on their own. They only do it when the user selects the directory.
I guess the improvement can be to show the implicit consent in the privacy settings page as well, and have a way to revoke it.
I guess not. Looks like if you choose the Documents directory once, you give your implicit permission to the app until you choose another restricted directory.
That's not what's happening here.
Forget about the first 5 steps. If you install the app and start from step 6, the behaviour will be the same. If the user chooses the Documents folder in the browse window in an app, the app can use the contents of the Documents folder without the need for that permission in the Settings page.
The Privacy settings applies only to access to the Documents folder without the user interaction.
"6. Click on Open from folder and select your Documents folder there. Confirm that works as expected and displays the name and contents of one of the text files in Documents."
It's because in step 6 the user explicitly selected the Documents folder.
The app can access the Documents folder because the user chose that directory in the native file browse dialog during the same run of the app. IMO that's a reasonable trade-off.
I guess the improvement can be to show the implicit consent in the privacy settings page as well, and have a way to revoke it.