Sandboxing stopped: All installed Flathub apps have access to all folders and files outside their sandbox. What could cause this challenge?

Francewhoa:

All global filesystem Flatpak permissions are denied. Same for the app filesystem Flatpak permissions. They are all denied.

The sentence you quoted was mainly meant as part of the explanation that there are two ways a Flatpak can gain access to files. Maybe that could’ve been worded better.

Also, in your original post you did say you have set a filesystem permission for the application, for the documents folder.