How would Google know how much money any app not using their billing system is getting?

Maybe they audit you when something smells funny and it becomes worth it for them? Microsoft don't set EY (other hired gun auditers may apply) on every small company to check they are activating Windows correctly.

I don't see anyone else asking this question. Seems like a major detail Google is burying.

I'm guessing the alternate billing flow will contractually require the app to "phone home" to Google with how much the user spent. Presumably will be part of the app review process.