Google will soon be more selective about which apps in the Play Store can see all the other apps you have installed (via XDA Developers). As Ars Technica notes, your list of installed apps, innocent as it seems, can communicate with developers' personal traits such as dating preferences and political affiliation. So, starting on May 5, 2021, developers will have to provide very good reasons why Google should allow you to access information like this.
Android 11 apps that are currently requesting the QUERY_ALL_PACKAGES "QUERY_ALL_PACKAGES" permission can see the full list of apps that you have stored on your device. But Google recently updated its developer program policy and now considers this information "personal and confidential user data," limiting which apps can use it.
Once the change takes effect in May, apps can only use the permission of their "primary user encounters a functionality or purpose that requires broad visibility in the installed apps on the user's device". Examples of applications that will be allowed to continue using this permission are file management, browsers, and antivirus applications that need data "for awareness or compatibility purposes". Banking apps, digital wallet apps, and any other app that includes "financial transaction functionality" will receive a pass "for security purposes."
Apps that do not have a justified use case permission risk being removed from the Google Play Store. All developers who want to keep the permission in their applications must fill out a declaration form justifying its use.
In case you are concerned that developers may still abuse the permission, Google's documentation clearly states that it will be difficult to offend apps, whether they are new to the Play Store or just updates to existing apps. Google may suspend apps and possibly terminate developer accounts.