I've tried to upload an updated app to Google Play, but keep getting the above error, even though I've deleted every possible extension or component that it could possibly be related to.
The only extension is BluetoothLE and the installed components are
Google Play suggests that I remove the permission from the manifest, but surely that's a rabbit hole I shouldn't have to go down?
I'm at a loss as to where to go next.
Any suggestions, please?
Neither the BLE extension nor any of your used components declares this permission in the Manifest.
Post the aia or send it me via PM. And upload the compiled app (APK) to Google Drive and post the link here.
Your app does not declare this permission (REQUEST_INSTALL_PACKAGES). So the message (warning) from Google must have another reason. Take a screenshot of the message and post it here. Also let us know what other internal, alpha, beta test tracks of this app exist.
See also my post about this in the old AI2 forum:
https://groups.google.com/g/mitappinventortest/c/jWMVX5V1xfw/m/pTYp8rxrAwAJ
https://groups.google.com/g/mitappinventortest/c/jWMVX5V1xfw/m/ioOu0VdwAwAJ
I did recently get the same warning about the earlier, published version, but surely that wouldn't affect an update version?
Yes thank you, Anke, I did read that, but not being very familiar with the process, I assumed that the Open, Closed and Internal testing tracks flagged as inactive above indicated that there are no other instances of the app other than the previously released published version (which also was given the permission warning).
I just checked the 3 tracks. There are no releases on any of them.
Ok, this means that you have never released your app via a test track, but always directly as a production version. Is that correct? If that's the case, then I wouldn't have a clue what's going on in your Play Developer Console either.
Post a screenshot of "App Bundle Explorer".
Yes, that's correct, all releases were directly published as production releases. I've never used test tracks.
I downloaded APK Editor Studio, and, as you said, there are no offending permissions in the app.
And even Google acknowledges that the apk does not contain the REQUEST_INSTALL_PACKAGES permission.
Increase the version code by 1 (to 42), build the APK and upload it as an internal test. If there is an (error) message from Google afterwards, post it.
Google's logic is absolutely crazy. I can't upload an update to address a permissions error because the previously published version has this "error" (which, of course, I can't edit or remove without uploading an update.
So, I go to attempt to declare sensitive permissions by clicking on the "Go to app content" link and it takes me to a place where I have to declare permissions that don't exist in the update version.
So, basically, I have to invent non-existent functionality and untrue reasons why my app needs this functionality, along with a mea culpa Youtube video explaining why I need this functionality that I don't want, need or have.
It's reminiscent of the Mao era where the accused had to confess to imaginary crimes before they could be rehabilitated.
So, this impasse is preventing me from uploading an update.
I can't trust your publishing process anymore. 
So go to App Bundle Explorer and download the latest APK (version code 41 or 42) from THERE, upload it to Google Drive and post the link.
... and you should remove some errors:
There is no screen "Edit_screen".
Good catch, Anke, I've removed that reference.
Here is the link to the downloaded distribution APK 41-1.apk - Google Drive
For reference, this is the downloaded original uploaded file (!). It's 0.01MB smaller. 41.apk - Google Drive
Thank you for your ongoing patience.
REQUEST_INSTALL_PACKAGES is also not declared in the APK from the Google Play Developer Console. In this respect, it is puzzling why this error message (warning) appears. Now the only advice I can give you is to write to → Google Play Developer Support and ask for an explanation.
PS: And let me/us know, I'm curious now too.
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And take a screenshot from the Google Play Console of the test devices that Google uses for the internal test (usually 4-7 devices).
I've submitted a request for an explanation (again), so we'll wait and see.
I can't get anywhere with submitting the update for any of the test tracks because on every page I get these warnings and can't proceed any further.
I'll post the response (if any).
After more than a week you should actually have received an answer from Google. If so, please let us know...